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TSM Stock Study (9-24-25)

Posted by on January 10, 2025 at 07:37 | Last modified: October 23, 2025 10:21

I recently did a stock study on Taiwan Semiconductor Manufacturing Co. Ltd. ADR (TSM) with a closing price of $262.71. Previous studies are here, here, and here.

M* writes:

     > Taiwan Semiconductor Manufacturing Co. is the world’s largest
     > dedicated chip foundry, with mid-60s market share in 2024. TSMC
     > was founded in 1987 as a joint venture of Philips, the government
     > of Taiwan, and private investors. It went public in 1994 and
     > as an ADR in the US in 1997. TSMC’s scale and high-quality
     > technology allow the firm to generate solid operating margins,
     > even in the highly competitive foundry business. Furthermore,
     > the shift to the fabless business model has created tailwinds
     > for TSMC. The foundry leader has an illustrious customer
     > base, including Apple, AMD, and Nvidia, that looks to apply
     > cutting-edge process technologies to its semiconductor designs.

Over the past decade, this mega-size (> $50B annual revenue) company has grown sales and EPS at annualized rates of 15.1% and 17.4%, respectively. Lines are up, straight, and parallel except for an EPS dip in ’19 and sales/EPS dip in ’23. Five-year EPS (sales) R^2 is 0.78 (0.88) and Value Line gives an Earnings Predictability score of 75.

Over the past decade, PTPM is greater than peer and industry averages while increasing from 41.5% (’15) to 48.6% (’24) with a last-5-year mean of 46.0%. ROE slightly trails while ranging from 21.6% in ’19 to 37.4% in ’22 with a last-5-year mean of 29.5%. Debt-to-Capital is much lower than peer and industry averages, ranging from 9.8% in ’18 to 26.0% in ’21 with a last-5-year mean of 21.5%.

Quick Ratio is 2.1 and Interest Coverage is 153 per M* who assigns a “Wide” Economic Moat and rates the company “Standard” for Capital Allocation. Value Line gives an A+ rating for Financial Strength.

With regard to sales growth:

My 12.0% forecast is below the range.

With regard to EPS growth:

My 13.0% forecast is bottom of the long-term-estimate range (mean of six: 20.2%). I will use ’24 EPS of $6.96/share as the initial value rather than 2025 Q2 EPS of $8.69.

My Forecast High P/E is 26.0. Over the past decade, high P/E increases from 14.1 (’15) to 30.5 (’24) with a last-5-year mean of 28.3 and a last-5-year-mean-average P/E of 20.4. I am forecasting above the last-10-year median of 21.8.

My Forecast Low P/E is 9.0. Over the past decade, low P/E ranges from 9.2 (’22) to 15.5 (’19) with a last-5-year mean of 12.5 (26.3 outlier in ’21 excluded). I am forecasting below the range.

My Low Stock Price Forecast (LSPF) of $134.30 is default based on $6.96/share initial value gives an unreasonable $64.70: 77.9% less than the previous close. I am going with the 52-week low despite being 52.5% less than the previous close. Semiconductors are a cyclical industry and I expect to see lower valuations again.

Over the past decade, Payout Ratio (PR) ranges from 28.6% (’22) to 58.8% (’18) with outliers from ’15 (0%) and ’19 (90.6%) excluded. The last-5-year mean is 38.7%. I am forecasting below the entire range at 28.0%.

These inputs land TSM in the SELL zone with a U/D ratio of 0.1. Total Annualized Return (TAR) is 2.1%.

PAR (using Forecast Average—not High—P/E) is NEGATIVE 4.5%. If a healthy margin of safety (MOS) anchors this study, then I can proceed based on TAR but even that is less than the risk-free rate (TBills).

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 254 studies (my study and 120 other outliers excluded) over the past 90 days, averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 15.0%, 15.6%, 27.0, 15.2, and 38.7%, respectively. I am lower across the board. Value Line’s projected average annual P/E of 18.0 is lower than MS (21.1) but higher than mine (17.5).

MS high / low EPS are $16.95 / $8.21 vs. my $12.82 / $6.96 (per share). My high EPS is lower due to a lower growth rate. Value Line’s high EPS of $18.50 soars above both.

MS LSPF of $133.00 implies Forecast Low P/E of 16.2: more than the above-stated 15.2. MS LSPF is 6.6% greater than the default $8.21/share * 15.2 = $124.79 resulting in more aggressive zoning. MS LSPF is 1.0% less than mine.

With regard to valuation, PEG is 2.2 and 1.3 per my projected P/E and Zacks, respectively: slightly overvalued. Relative Value [(current P/E) / 5-year-mean average P/E] is extremely rich at 1.59.

MOS is strong in this study because my inputs are near or below respective analyst/historical ranges and MS averages. That is further supported by an MS TAR that is 12.5% per year greater than my 2.1%.

My final rating is HOLD rather than SELL because the company has double-digit long-term sales projections. Were it in my portfolio, history shows I might regret selling what appeared to be an overvalued stock that actually had the engine to continue powering higher. Otherwise, it makes no sense for me to establish a new position at this time.

Per U/D, TSM is a BUY under $134.30/share. Given a forecast high ~ $295, 294.9 * ((1 – ((15.0 – 1.2) / 100)) ^ 5) ~ $140 meets the BI TAR criterion.

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CHDN Stock Study (10-22-25)

Posted by on January 7, 2025 at 07:07 | Last modified: October 22, 2025 09:38

I recently did a stock study on Churchill Downs Inc. (CHDN) with a closing price of $96.61. The previous study is here.

M* writes:

     > Churchill Downs Inc is a gaming entertainment, online wagering,
     > and racing company. It operates through three business segments:
     > Live and Historical Racing, Wagering Services, and Gaming. The
     > Live and Historical Racing segment includes live and historical
     > pari-mutuel racing. The Wagering Services segment includes the
     > revenue and expenses from pari-mutuel wagers through TwinSpires,
     > companies retail and online sports betting business and Gaming
     > segment includes revenue and expenses for the casino properties
     > and associated racetracks that support the casino license. The
     > Gaming segment generates revenue and expenses from slot
     > machines, video lottery terminals, video poker, HRMs,
     > ancillary food and beverage services, hotel services,
     > commission on pari-mutuel wagering, and racing events.

Over the past decade, the medium-size company has grown sales and earnings at annualized rates of 10.5% and 25.7%. Lines are mostly up, straight, and parallel except for sales dips in ’17 and ’20 along with EPS declines in ’19, ’20 (large), and ’23. 5- (10-) year EPS R^2 is 0.62 (0.37) and Value Line (VL) gives an Earnings Predictability score of 30.

Over the past decade, PTPM leads peer and industry averages while trending up from 9.2% (’15) to 21.0% (’24) with a last-5-year mean of 19.9%. ROE also leads peer and industry averages while trending up from 8.0% (’15) to 38.1% (’24) with a last-5-year mean of 45.7%. Unfortunately, Debt-to-Capital is higher than peer and industry averages over the last few years as it has increased from 55.9% (’15) to 81.9% (’24) with a last-5-year mean of 84.7%.

Quick Ratio is 0.39 and Interest Coverage is only 2.9 per M* (3.2 per VL) who also assigns a “Narrow” Economic Moat. VL gives a B+ grade for Financial Strength.

With regard to sales growth:

My 3.0% forecast is toward lower end of the range.

With regard to EPS growth:

My 5.0% forecast is below the long-term-estimate range (mean of five: 8.2%). Initial value is ’24 EPS of $5.68/share instead of 2025 Q2 EPS of $5.82 (annualized).

My Forecast High P/E is 21.0. Over the past 10 years, high P/E ranges from 21.8 in ’22 to 41.3 in ’15 and ’21 (upside outlier of 644 in ’20 excluded). The last-5-year mean is 29.2 and the last-5-year-mean average P/E (also excluding ’20) is 24.8. I am below the range.

My Forecast Low P/E is 13.0. Over the past 10 years, low P/E ranges from 15.1 in ’22 to 27.6 in ’21 (upside outlier of 160 in ’20 excluded) with a last-5-year mean of 20.3. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) of $73.80 is default based on initial value given above. This is 23.6% less than the previous close and 13.8% less than the 52-week low.

Over the past decade, Payoff Ratio (PR) falls from 31.1% in ’15 to 7.2% in ’24 with a last-5-year mean of 7.7% (excluding upside outlier of 189% in ’20). I am forecasting below the range at 6.0%.

These inputs land CHDN in the HOLD zone with a U/D ratio of 2.4. Total Annualized Return (TAR) is 9.8%.

PAR (using Forecast Average—not High—P/E) of 5.3% is less than I seek in a medium-size company. If a healthy margin of safety (MOS) anchors this study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only five studies done in the past 90 days (my study and four outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 6.5%, 8.2%, 27.4, 15.5, and 30.1%. [Although a sample size of five studies is too small for a valid comparison] I am lower across the board. VL projects a future average annual P/E of 25.0, which is higher than MS (20.0) and much higher than me (17.0).

MS high / low EPS are $8.72 / $5.80 versus my $7.25 / $5.68 (per share). My high EPS is less due to a lower growth rate. VL is highest at $9.35.

MS LSPF of $76.10 implies a Forecast Low P/E of 13.1: less than the above-stated 15.5. MS LSPF is 15.4% less than the default $5.80/share * 15.5 = $89.90, which results in more conservative zoning. MS LSPF is 3.1% greater than mine, however.

I believe MOS is robust in this study because my inputs are near or below respective analyst/historical ranges [and MS averages]. In [anecdotal support is MS TAR (20.5%): 10.7% per year greater than mine.

With regard to valuation, PEG is 1.8 and 3.2 per Zacks and my projected P/E, respectively: somewhat overvalued (1.6 per M*). Relative Value [(current P/E) / 5-year-mean average P/E] is cheap at 0.67.

Qualitatively speaking, my only concern with this company includes low liquidity ratios and high Debt-to-Capital.

Per U/D, CHDN is a BUY under $93/share. BI TAR criterion is met 152.2 / ((14.57 / 100 ) +1 ) ^ 5 ~ $77 given forecast high price ~$152.

A 90-day free trial to BetterInvesting® may be secured here (also see link under “Pages” section at top right of this page).

P.S. The Kentucky Derby is coming to Prime Time in ’26. You heard it here first!

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YETI Stock Study (10-21-25)

Posted by on January 2, 2025 at 07:16 | Last modified: October 21, 2025 10:42

I recently did a stock study on YETI Holdings (YETI, $33.99). Previous studies are here, here, here, and here.

M* writes:

     > YETI Holdings Inc is a designer, marketer, and distributor of
     > premium products for the outdoor and recreation market sold under
     > the YETI brand. The company offers products including coolers and
     > equipment, drinkware, and other accessories. Its trademark products
     > include YETI Tundra, Hopper, YETI TANK, Rambler, Colster, Rambler
     > among others. The company distributes products through wholesale
     > channels and through direct-to-consumer, or DTC, channels.

Since 2018 when this medium-size company begins public trading, sales and earnings have grown at annualized rates of 15.9% and 20.2%, respectively. Lines are up and somewhat parallel due to EPS dips in ’19 and ’22 [latter due to operational snafus including recall of defective items and inflation-induced demand destruction per Value Line (VL)]. 5- (10-) year EPS R^2 is 0.00 (0.49) per BI website and VL gives an Earnings Predictability score of 75.

Since 2018, PTPM leads peer and industry averages while ranging from 7.3% in ’22 to 19.0% in ’21 with a last-5-year mean of 14.3%. Over the last six years, ROE also leads peer and industry averages despite falling from 57.3% in ’19 to 22.1% in ’24 with a last-5-year mean of 36.3%. Debt-to-Capital is less than peer and industry averages in falling from 91.9% (’18) to 18.9% (’24) with a last-5-year mean of 25.4%.

Quick Ratio is 1.32 per M* and Interest Coverage is 241 per Barchart.com. M* also assigns a “Narrow” Economic Moat and gives a B grade for Financial Health (per BI website). VL gives a B for Financial Strength.

With regard to sales growth:

My 1.0% forecast is near bottom of the range.

With regard to EPS growth:

My 3.0% forecast is below the long-term-estimate range (mean of four: 6.3%). Initial value will be ’24 EPS of $2.05/share rather than 2025 Q2 EPS of $2.10 (annualized).

My Forecast High P/E is 25.0. Since 2018, high P/E ranges from 25.0 in ’24 to 80.6 in ’22 with a last-5-year mean of 44.2 and a last-5-year-mean average P/E of 31.6. I am at bottom of the range.

My Forecast Low P/E is 13.0. Since 2018, low P/E ranges from 8.6 in ’20 to 27.0 in ’22 with a last-5-year mean of 19.0. I am forecasting below all but ’20.

My Low Stock Price Forecast (LSPF) of $26.60 is default based on initial value given above. This is 21.7% less than the previous close and equal to the 52-week low.

These inputs land YETI in the BUY zone with a U/D ratio of 4.1. Total Annualized Return (TAR) is 13.6%.

PAR (using Forecast Average—not High—P/E) of 6.9% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors this study, then I can proceed based on TAR instead.

To assess MOS, I start by comparing my inputs with those of Member Sentiment (MS). Based on only 21 studies (my study and 7 outliers excluded) over the past 90 days, averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 5.4%, 6.6%, 25.0, and 15.5, respectively. I am equal to (high P/E) or lower across the board. VL’s projected average annual P/E of 15.0 is lower than MS (20.3) and lower than mine (19.0).

MS high / low EPS are $2.89 / $2.08 versus my $2.38 / $2.05 (per share). My high EPS is less due to a lower growth rate. VL’s $4.00 soars above both.

MS LSPF of $26.30 implies a Forecast Low P/E of 12.6: less than the above-stated 15.5. MS LSPF is 18.4% less than the default $2.08/share * 15.5 = $32.24 resulting in more conservative zoning. MS LSPF is also 1.1% less than mine.

I believe MOS is robust in this study because my inputs are near or below respective analyst/historical ranges and MS averages. MS TAR (14.5%) is 0.9% per year greater than mine.

With regard to valuation, PEG is 2.0 and 5.2 per Zacks and my projected P/E (low growth rate) with the latter extremely overvalued (M* is undervalued at 0.74). Relative Value [(current P/E) / 5-year-mean average P/E] is quite cheap at 0.51.

Per U/D, YETI is a BUY under $36. BI TAR criterion is met ~ 64.2 / ((14.87 / 100 ) +1 ) ^ 5 = $32 given forecast high price ~$64 (no dividend).

Full disclosure: I currently own YETI shares.

A 90-day free trial to BetterInvesting® may be secured here (also see link under “Pages” section at top right of this page).

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NFLX Stock Study (10-21-25)

Posted by on December 30, 2024 at 07:19 | Last modified: October 21, 2025 10:18

I recently did a stock study on Netflix Inc. (NFLX, $1238.56). Previous studies are here, here, here, here, and here.

M* writes:

     > Netflix’s relatively simple business model involves only one business,
     > its streaming service. It has the biggest television entertainment
     > subscriber base in both the US and the collective international
     > market, with more than 300 million subscribers globally. Netflix has
     > exposure to nearly the entire global population outside of China. The
     > firm has traditionally avoided live programming or sports content,
     > instead focusing on on-demand access to episodic television, movies,
     > and documentaries. The firm introduced ad-supported subscription
     > plans in 2022, giving the firm exposure to the advertising market
     > in addition to the subscription fees that have historically
     > accounted for nearly all its revenue.

Over the past decade, this large-size company has grown sales and earnings at annualized rates of 21.6% and 59.2%, respectively. Lines are mostly up, straight, and parallel except for an EPS decline in ’22. 5-year EPS R^2 is 0.82 and Value Line (VL) gives an Earnings Predictability score of 65.

Over the past decade, PTPM is about even with peer and industry averages despite trending higher from 2.1% (’15) to 25.6% (’24) with a last-5-year mean of 18.6%. ROE is also about even with peer and industry averages despite trending up from 5.5% (’15) to 37.3% (’24) with a last-5-year mean of 28.2%. Debt-to-Capital is a bit higher than peer and industry averages despite falling from 51.6% (’15) to 38.6% (’24) for a last-5-year mean of 40.6%.

Quick Ratio and Interest Coverage are 1.12 and 16.7 per M* who assigns “Narrow” Economic Moat, rates the company “Exemplary” for Capital Allocation, and gives an A grade for Financial Health (per BI website). VL gives an A+ rating for Financial Strength.

With regard to sales growth:

My 10.0% forecast is at bottom of the range.

With regard to EPS growth:

My 15.0% forecast is at bottom of the long-term-estimate range (mean of seven: 22.4%). I will use ’24 EPS of $19.83/share as the initial value rather than 2025 Q2 $23.47 (annualized).

My Forecast High P/E is 35.0. Over the past 10 years, high P/E decreases from triple digits to 47.5 (’24) with a last-5-year mean of 61.5 and a last-5-year-mean average P/E of 46.1. At some point, I expect P/E to fall back to earth. For now, I am forecasting at the upper end of my comfort zone.

My Forecast Low P/E is 23.0. Over the past 10 years, low P/E decreases from triple digits to 23.3 (’24) with a last-5-year mean of 30.7. I am forecasting toward the bottom of the range (only 16.4 in ’22 is less).

My Low Stock Price Forecast (LSPF) is $744.00. Default $466.10 based on initial value given above seems unreasonably low at 63.2% (38.7%) less than the previous close (52-week low). My forecast, the 52-week low, is 39.9% less than previous close.

These inputs land NFLX in the SELL zone with a U/D ratio of 0.3. Total Annualized Return (TAR) is 2.4%.

PAR (using Forecast Average—not High—P/E) of NEGATIVE 1.4% is unthinkable as a new investment prospect. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR albeit much less than the current risk-free rate.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 149 studies (my study and 67 outliers excluded) over the past 90 days, averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 12.8%, 17.5%, 48.0, and 28.5. I am lower across the board. VL’s projected average annual P/E of 39.5 is greater than MS (38.3) and much greater than mine (29.0).

MS high / low EPS are $51.46 / $22.72 versus my $39.89 / $19.83 (per share). My high EPS is less due to a lower growth rate. VL is in the middle at $45.00.

MS LSPF of $720.50 implies a Forecast Low P/E of 31.7: more than the above-stated 28.5. MS LSPF is 11.3% greater than the default $22.72/share * 28.5 = $647.52, which results in more aggressive zoning. MS LSPF is 3.2% less than mine, however.

I believe MOS is robust in this study because my inputs are near or below respective analyst/historical ranges and MS averages. In support is MS TAR (14.6%): 12.2% per year greater than mine.

With regard to valuation, PEG is 2.00 and 3.10 per Zacks and my projected P/E, respectively: somewhat overvalued (1.61 per M*). Relative Value [(current P/E) / 5-year-mean average P/E] is also a bit expensive at 1.15.

Despite my SELL rating, existing shareholders may want to HOLD because sales growth is still projected in the double digits.

Per U/D, NFLX is a BUY under $907. BI TAR criterion is met at 1396 / ((14.87 / 100 ) +1 ) ^ 5 = $698 given forecast high price $1396 (no dividend). I am not surprised to see a stock up 68% in the past 12 months far extended from a buy point.

Full disclosure: I currently own NFLX shares.

A 90-day free trial to BetterInvesting® may be secured here (also see link under “Pages” section at top right of this page).

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MBUU Stock Study (10-20-25)

Posted by on December 27, 2024 at 07:03 | Last modified: October 21, 2025 08:20

I recently did a stock study on Malibu Boats Inc. (MBUU, $30.25). Previous studies are here, here, here, and here.

M* writes:

     > Malibu Boats is a leading designer and manufacturer of power
     > boats in the United States. It is the market leader in
     > performance sport boats, sold under its Malibu and Axis brands.
     > It acquired Cobalt Boats, a leading producer of sterndrive
     > boats in the U.S. in the 24-foot to 29-foot segment, and
     > Pursuit Boats, which makes high-end offshore and outboard
     > motorboats in 2018. In 2021, it purchased Maverick Boat Group,
     > a top seller of flat fishing boats, with exposure to bay,
     > dual-console, and center-console boats. Malibu has also
     > expanded into boat trailers and accessories, and in 2020
     > began producing its own engines (Monsoon) for its
     > performance sport boats and now for Cobalt. Malibu’s target
     > market includes a wide range of water enthusiasts who
     > embrace the active outdoor lifestyle.

Over the past decade, the small-size company grows sales and earnings at annualized rates of 18.6% and 7.8% excluding ’24 whose negative earnings disrupts the calculation [I think overall earnings growth should still be negative since ’16 to ’25 is $1.00 to $0.76/share]. Through ’23, lines are mostly up, straight, and parallel except for a sales dip in ’20 (FY ends Jun 30) and EPS dips in ’18, ’20, and ’23. With 2024-5, however, visual analysis looks broken. 5- (10-) year EPS R^2 is 0.77 (0.01) [excluding ’24, these become 0.76 (0.07); with a negative number in ’24, I can’t explain why the 5-year only dips by 0.01] and Value Line (VL) gives an Earnings Predictability score of 35.

Over the past decade, PTPM leads peer and industry averages until ’24 despite falling from 12.7% (’16) to 2.5% (’25) with a last-5-year mean of 7.8%. ROE falls from 72.6% (’17) to 2.9% (’25) with a last-5-year mean of 15.1%. Debt-to-Capital is lower than peer and industry averages while falling from 84.0% (’16) to 3.8% (’25) with a last-5-year mean of 10.4%.

Quick Ratio is only 0.52 with Interest Coverage 11.8 per M* who assigns a “Narrow” Economic Moat, gives a “Standard” rating for Capital Allocation, and gives a C grade for Financial Health (via BI website). VL rates the company B for Financial Strength.

With regard to sales growth:

My 1.0% forecast is near bottom of the range.

With regard to earnings growth:

My 20.0% forecast is below the long-term-estimate range [mean of only two: 38.8%; negative annual earnings often disrupts long-term forecasts from Zacks, Seeking Alpha, LSEG, and apparently Finviz for the next year(s)]. My initial value is ’25 EPS of $0.76/share: an 85% EPS decline from ’23.

My Forecast High P/E is 17.0. Over the last 10 years, high P/E decreases from 21.5 (’16) to 14.0 (’23) with a last 5-year mean of 14.4 (NMF and 62.9 excluded from ’24 and ’25, respectively) and last 5-year-mean average P/E of 11.3 (same years excluded from low P/E calculation). My forecast is arbitrarily high enough to avoid an INVALID study.

My Forecast Low P/E is 6.0. Over the last 10 years, low P/E decreases from 11.4 (’16) to 9.2 (’23) with a last-5-year mean of 8.1 (’24 and ’25 excluded). I am forecasting below the range.

My Low Stock Price Forecast is $21.00. Default $4.60 based on initial value given above is unreasonably low at 84.8% (81.1%) less than the previous close (52-week low). My arbitrary selection is 30.6% (13.9%) less (respectively).

These inputs land MBUU in the SELL zone with an U/D ratio of 0.2. Total Annualized Return (TAR) is 1.2%.

PAR (using Forecast Average—not High—P/E) of NEGATIVE 6.4% is unthinkable for an investment prospect. If a healthy margin of safety (MOS) anchors this study, then I can proceed based TAR instead but even that is much lower than the current risk-free rate.

To assess MOS, I would normally start with Member Sentiment but this novel situation confuses us all. Aside from mine, only three other studies have been done in the last 90 days. Two of the four use negative numbers for low EPS, which I find unreasonable. The other study uses the 55.5% EPS long-term growth estimate to get a forecast high stock price of $183, which I find unreasonable.

I find my study unreasonable with its Forecast High P/E greater than three of the past five years (including an NMF but not including ’25, which is mathematically exaggerated due to small base).

I have little confidence with what multiple the market will assign the stock going forward or how/if its earnings recovery will proceed since the ’24-’25 debacle is a novel event. In my opinion, this is precisely why we seek up, straight, and parallel visual analysis thereby representing consistent historical behavior.

Per U/D, MBUU is a BUY under $23.80/share. BI TAR criterion is met under $16.00/share given a forecast high price ~ $32. Possibly even better to avoid for the next five years altogether. I may periodically revisit just to check this supposition.

A 90-day free trial to BetterInvesting® may be secured here (also see link under “Pages” section at top right of this page).

Full disclosure: I currently own MBUU shares.

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BIRK Stock Study (10-19-25)

Posted by on December 24, 2024 at 07:15 | Last modified: October 20, 2025 09:44

I recently did a stock study on Birkenstock Holding PLC (BIRK, $41.94).

M* writes:

     > Birkenstock Holding PLC is a company that manufactures and sells
     > footbed-based products, including sandals, closed-toe silhouettes,
     > and other products, such as skincare and accessories, for everyday
     > leisure, and work. It sells its products through two main channels:
     > business-to-business (B2B) which comprises sales made to established
     > third-party store networks, and direct-to-consumer (DTC) which
     > comprises sales made on globally owned online stores through the
     > Birkenstock.com domain and sales made in Birkenstock retail stores.

The medium-size company begins trading publicly in Oct 2023. For purposes of this analysis, I will use data since 2021 (excluding 2020 due to negative EPS). Given the limited amount of historical data available, I would consider no more than a speculative position in this stock.

Since 2021 (FY ends Sep 30), the company has grown sales and EPS at annualized rates of 19.3% and 2.8%, respectively. Lines are somewhat up, straight, and parallel except for big EPS dip in ’23.

Since 2021, PTPM leads peer and industry averages while ranging from 10.3% in ’23 to 20.2% in ’22 with a last-4-year mean of 15.6%. ROE in ’24 trails peers and the industry at 7.0%. Debt-to-Capital is comparable to peers and the industry while falling from 48.2% (’21) to 34.0% (’24) with a last-4-year mean of 43.6%.

Quick Ratio is 1.13 with Interest Coverage 7.5 per M* who assigns a “Narrow” [quantitative] Economic Moat and gives a B grade for Financial Health. Value Line (VL) rates the company B+ for Financial Strength.

With regard to sales growth:

My 12.0% forecast is below the range.

With regard to EPS growth:

My 18.0% per year forecast is below the long-term-estimate range (mean of five: 23.2%). My initial value will be ’24 EPS of $1.11 rather than 2025 Q3 EPS of $1.80 (annualized).

My Forecast High P/E is 24.0. High P/E from ’24 is 58.6. I am centering forecasts below VL’s future average annual P/E of 20.

My Forecast Low P/E is 14.0. Low P/E from ’24 is 32.4. I am centering forecasts below VL’s future average annual P/E of 20.

My Low Stock Price Forecast (LSPF) is $29.00. Default ($15.50) based on initial value given above is unreasonably low at 63.0% (61.8%) less than previous close (52-week low), respectively. My arbitrary forecast is 30.9% (28.6%) less.

These inputs land BIRK in the HOLD zone with a U/D ratio of 1.5. Total Annualized Return (TAR) is 7.7%.

PAR (using Forecast Average—not High—P/E) 2.8% is less than the current risk-free rate (T-bills). If a healthy margin of safety (MOS) anchors this study, then I can proceed based on TAR instead (still less than I seek in a medium-size company).

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only seven studies done in the past 90 days (two outliers including mine excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 14.7%, 19.8%, 37.8, and 29.4. I am lower across the board. VL projects a future average annual P/E of 20.0, which is higher than MS (33.6) and [intentionally] higher than mine (19.0).

MS high / low EPS are $3.31 / $1.44 versus my $2.53/ $1.11 (per share). My high EPS is less due to a lower growth rate. VL is greater than both at $3.50.

MS LSPF of $40.30 implies a Forecast Low P/E of 28.0: less than the above-stated 29.4. MS LSPF is 4.8% less than the default $1.44/share * 29.4 = $42.34 resulting in more conservative zoning. MS LSPF is 39.0% greater than mine, however.

I believe MOS is robust in this study because my inputs are below respective analyst/historical ranges [and MS averages although low MS sample size only makes sense as anecdotal comparison] including significant multiple compression. Supporting the MOS is MS TAR (20.8%) being 13.1% per year greater than mine.

With regard to valuation, PEG is 0.8 and 1.1 per Zacks and my projected P/E, respectively: fairly valued. In contrast, M* suggests extremely undervalued at 0.3.

Per U/D, BIRK is a BUY under $36.90/share. BI TAR criterion is met at 60.7 / ((14.87 / 100) + 1) ^ 5 = $30.35 given forecast high price $60.70.

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TROW Stock Study (10-18-25)

Posted by on December 19, 2024 at 06:58 | Last modified: October 19, 2025 11:22

I recently did a stock study on T. Rowe Price Group, Inc. (TROW, $103.15). Previous study is here.

M* writes:

     > T. Rowe Price provides asset management services for individual
     > and institutional investors. It offers a broad range of no-load
     > US and international stock, hybrid, bond, and money market funds…
     > Approximately two-thirds of managed assets are held in retirement-
     > based accounts, which provides T. Rowe Price with a somewhat
     > stickier client base than most of its peers. The firm also
     > manages private accounts, provides retirement planning advice,
     > and offers discount brokerage and trust services. The company
     > is primarily a US-based asset manager, deriving less than 10%
     > of its AUM from overseas.

Over the last decade, this medium-size company has grown sales and EPS at annualized rates of 6.5% and 7.6%, respectively. Lines are up, straight, and parallel except for sales dips in ’22 (large) and ’23 and EPS dip in ’22. Five- (10-) year EPS R^2 is 0.19 (0.46) and Value Line (VL) gives an Earnings Predictability rating of 90.

Over the last decade, PTPM leads peer and industry averages despite falling from 47.7% (’15) to 39.7% (’24) with a last-5-year mean of 42.5%. ROE also leads peer and industry averages despite falling from 24.8% (’15) to 19.9% (’24) with a last-5-year mean of 24.7%. The company has no long-term debt and is therefore lower than peers and the industry on Debt-to-Capital with a last-5-year mean of 2.8% (rentals).

Quick Ratio is 10.95 with Interest Coverage N/A (consistent with no long-term debt) per M* who assigns a “Narrow” Economic Moat, gives an “Exemplary” rating for Capital Allocation, and offers an A grade for Financial Health. VL rates the company A+ for Financial Strength.

With regard to sales growth:

My 2.0% forecast is below the range.

With regard to EPS growth:

My 0.5% per year forecast is toward bottom of the long-term-estimate range (mean of seven: 3.5%). My initial value is 2025 Q2 EPS of $8.95/share (annualized) instead of ’24 EPS of $9.15.

My Forecast High P/E is 13.0. Over the last 10 years, high P/E decreases from 18.8 (’15) to 13.7 (’24) with a last 5-year mean of 15.9 (29.7 outlier in ’22 excluded) and last 5-year-mean average P/E of 13.5. I am below the range.

My Forecast Low P/E is 8.0. Over the last 10 years, low P/E decreases from 14.2 (’15) to 11.0 (’24) with a last-5-year mean of 11.1. I am forecasting below the range and current P/E (14.8).

My Low Stock Price Forecast (LSPF) of $71.60 is default based on initial value given above. This is 30.6% (8.0%) less than the previous close (52-week low).

Over the past decade, Payout Ratio ranges from 32.9% in ’21 to 71.6% in ’22 with a last-5-year mean of 51.5%. I am forecasting below the range at 32.0%.

These inputs land TROW in the HOLD zone with a U/D ratio of 0.5. Total Annualized Return (TAR) is 5.4%.

PAR (using Forecast Average—not High—P/E) is less than the current risk-free rate (T-bills) at 1.7%. If a healthy margin of safety (MOS) anchors this study, then I can proceed based on TAR instead (still less than I seek in a medium-size company).

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 78 studies done in the past 90 days (my study and 27 other outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and Payout Ratio are 5.2%, 5.8%, 15.0, 10.7, and 47.4%. I am lower across the board. VL projects a future average annual P/E of 13.0, which is higher than MS (12.9) and higher than mine (10.5).

MS high / low EPS are $12.01 / $8.79 versus my $9.18 / $8.95 (per share). My high EPS is less due to a lower growth rate. VL’s high EPS soars above both at $13.00.

MS LSPF of $89.30 implies a Forecast Low P/E of 10.2: less than the above-stated 10.7. MS LSPF is 5.1% less than the default $8.79/share * 10.7 = $94.05 resulting in more conservative zoning. MS LSPF is still 24.7% greater than mine.

I believe MOS is robust in this study because my inputs are near or below respective analyst/historical ranges and MS averages. MS TAR of 14.8% is 9.4% per year greater than mine.

With regard to valuation, PEG is 5.7 and 22.9 (fractional growth rate) per Zacks and my projected P/E, respectively: significantly overvalued (also by M* at 9.4). Relative Value [(current P/E) / 5-year-mean average P/E] is cheap at 0.85.

Per U/D, TROW is a BUY under $83/share. BI TAR criterion is met ~ 119.3 / ((12.37 / 100 ) +1 ) ^ 5 = $66.50 given forecast high price ~$119.

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DECK Stock Study (10-16-25)

Posted by on December 16, 2024 at 06:42 | Last modified: October 16, 2025 11:08

I recently did a stock study on Deckers Outdoor Corp. (DECK, $96.44).

M* writes:

     > Founded in 1973, California-based Deckers designs and sells
     > casual and performance footwear, apparel, and accessories.
     > In fiscal 2025, Ugg and Hoka accounted for 51% and 45% of
     > total sales, respectively. The firm also markets niche brands
     > Teva and Ahnu. Deckers produces most of its sales through
     > wholesale partnerships but also operates e-commerce in more
     > than 50 countries and about 180 company-operated stores. It
     > generated 64% of its fiscal 2025 sales in the United States.

Since 2018, this medium-size company has grown sales and EPS at annualized rates of 15.8% and 34.3%, respectively (earlier years excluded due to small EPS mathematically distorting growth rate). Lines are up, straight, and parallel. Value Line (VL) gives an Earnings Predictability rating of 90.

Since 2018 (FY ends 3/31; reference to year at BI website and VL incremented to match), PTPM leads peer and industry averages while increasing from 11.6% to 24.9% in ’25 with a last-5-year mean of 20.7%. ROE leads peers but trails the industry while increasing from 10.6% to 36.1% in ’25 with a last-5-year mean of 30.6%. The company has no long-term debt and is therefore lower than peers and the industry on Debt-to-Capital with a last-5-year mean of 11.9% (rentals).

Quick Ratio is 2.02 and Interest Coverage is 374 (consistent with no long-term debt) per M* who assigns a “Narrow” Economic Moat, gives an “Exemplary” rating for Capital Allocation, and offers a B grade for Financial Health. VL rates the company A for Financial Strength.

With regard to sales growth:

My 7.0% forecast is below the range.

With regard to EPS growth:

My 4.0% per year forecast is below the long-term-estimate range (mean of seven: 7.0%). My initial value will be ’25 EPS of $6.33/share rather than 2026 Q1 $6.52 (annualized).

My Forecast High P/E is 20.0. Since 2018, high P/E increases from 27.6 to 35.4 in ’25 for a last 5-year mean of 29.0 and last 5-year-mean average P/E of 21.1. I am forecasting well below the range.

My Forecast Low P/E is 9.0. Since 2018, low P/E ranges from 8.2 in ’20 to 17.0 in ’25 with a last-5-year mean of 13.1. I am forecasting below the range and current P/E (14.8).

My Low Stock Price Forecast (LSPF) is $67.00. Default ($57.00) based on initial value given above seems unreasonably low at 40.9% (39.2%) less than the previous close (52-week low). My arbitrary selection is 30.5% (28.5%) less, respectively, and 5.2% less than the 2023 low price.

These inputs land DECK in the HOLD zone with a U/D ratio of 2.0. Total Annualized Return (TAR) is 9.8%.

PAR (using Forecast Average—not High—P/E) is less than the current risk-free rate (T-bills) at 3.0%. If a healthy margin of safety (MOS) anchors this study, then I can proceed based on the TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 177 studies done in the past 90 days (my study and 53 other outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 9.0%, 8.6%, 24.6, and 13.0. I am lower across the board. VL projects a future average annual P/E of 20.0, which is higher than MS (18.8) and much higher than mine (14.5).

MS high / low EPS are $9.80 / $6.49 versus my $7.70 / $6.33 (per share). My high EPS is lower due to a lower growth rate. Value Line’s high EPS is in the middle at $9.25.

MS LSPF of $83.00 implies a Forecast Low P/E of 12.8: less than the above-stated 13.0. MS LSPF is 1.6% less than the default $6.49/share * 13.0 = $84.37 resulting in more conservative zoning. MS LSPF is still 23.9% greater than mine.

I believe MOS is robust in this study because my inputs are below respective analyst/historical ranges and MS averages. MS TAR of 17.5% is 7.7% per year greater than mine.

With regard to valuation, PEG is 4.1 and 3.6 per Zacks and my projected P/E, respectively: significantly overvalued (0.48 per M* suggests undervalued, however). Relative Value [(current P/E) / 5-year-mean average P/E] is cheap at 0.70.

Per U/D, DECK is a BUY under $88/share. BI TAR criterion is met ~ $77 given a forecast high price ~$154 (no dividend).

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LULU Stock Study (10-16-25)

Posted by on December 13, 2024 at 07:03 | Last modified: October 16, 2025 10:38

I recently did a stock study on Lululemon Athletica Inc. (LULU, $167.10). Previous studies are here, here, and here.

M* writes:

     > Lululemon Athletica Inc. designs, distributes, and markets
     > athletic apparel, footwear, and accessories for women, men,
     > and girls. Lululemon offers pants, shorts, tops, and jackets
     > for both leisure and athletic activities such as yoga and
     > running. The company also sells fitness accessories, such
     > as bags, yoga mats, and equipment.

Over the past decade, this large-size company has grown sales and EPS at annualized rates of 21.6% and 26.5%, respectively [FY ends 1/31; reference to year at BI website and Value Line (VL) incremented to match]. Lines are mostly up, straight, and parallel except for EPS dips in ’18, ’21, and ’23. VL gives an Earnings Predictability rating of 90.

Over the past decade, PTPM leads peer and industry averages while ranging from 16.4% in ’23 to 24.3% in ’25 with a last-5-year mean of 20.6%. ROE is roughly equal to industry averages while trailing peers, increasing from 24.5% in ’16 to 44.7% in ’25 with a last-5-year mean of 35.9%. Debt-to-Capital is zero through 2019 and remains lower than peer and industry averages as the company maintains no long-term debt. The last-5-year mean is 25.0% (leases).

Current (Quick) Ratio is 2.27 (1.04) per M* who assigns a “Narrow” Economic Moat, gives an “Exemplary” rating for Capital Allocation, and offers a C grade for Financial Health [seems puzzling]. VL rates the company B++ for Financial Strength.

With regard to sales growth:

My 3.0% forecast is below the range.

With regard to EPS growth:

My 1.0% per year forecast is near bottom of the range (mean of six: 7.0%). My initial value will be ’25 EPS of $14.64/share rather than 2026 Q2 $14.71 (annualized).

My Forecast High P/E is 24.0. Over the past 10 years, high P/E ranges from 32.9 in ’25 to 64.9 in ’22 (’21 upside outlier of 88.9 excluded) for a last 5-year mean of 50.4 and last 5-year-mean average P/E of 39.3. I am well below the range.

My Forecast Low P/E is 9.0. Over the past 10 years, low P/E ranges from 15.4 in ’25 to 37.7 in ’23 with a last-5-year mean of 28.2. I am forecasting below the range and current P/E (11.5).

My Low Stock Price Forecast (LSPF) of $131.80 is default based on initial value given above. This is 21.1% (17.3%) less than the previous close (52-week low).

These inputs land LULU in the BUY zone with a U/D ratio of 5.4. Total Annualized Return (TAR) is 16.9%.

PAR (using Forecast Average—not High—P/E) is less than I seek for a large-size company at 8.5%. If a healthy margin of safety (MOS) anchors this study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 136 studies done in the past 90 days (31 outliers and my study excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 6.0%, 7.3%, 24.4, and 12.0. I am lower across the board. VL projects a future average annual P/E of 15.0, which is lower than MS (18.2) and lower than mine (16.5).

MS high / low EPS are $20.83 / $14.10 versus my $15.39 / $14.64 (per share). My high EPS is lower due to a lower growth rate. Value Line’s high EPS is in the middle at $16.00/share.

MS LSPF of $147.30 implies a Forecast Low P/E of 10.4: less than the above-stated 12.0. MS LSPF is 12.9% less than the default $14.10/share * 12.0 = $169.20 resulting in more conservative zoning. MS LSPF is still 11.8% greater than mine.

I believe MOS is robust in this study because my inputs are near or below respective analyst/historical ranges and MS averages. MS TAR of 22.5% is 5.6% per year greater than mine.

Anecdotally speaking, valuation metrics are about as dichotomous as any stock I have ever studied. PEG is 10.6 and 11.4 per Zacks and my projected P/E, respectively: beyond significantly overvalued. VL agrees: “hold off… until tangible signs of a turnaround emerge. While some view the recent pullback as a buying opportunity, we see elevated downside risk amid deteriorating sentiment, increased competition, and a premium category still struggling to regain traction.” On the other hand, Relative Value [(current P/E) / 5-year-mean average P/E] is dirt cheap at 0.29, Kim Butcher’s “quick and dirty DCF” calculates fair value 154% greater than the previous close, and CFRA has fair value 104% greater. CNN Business finds 34 analysts with 12-month stock forecasts ranging between 40% below to 81% above the previous close.

Despite a robust MOS, because of the tremendous uncertainty expressed here I would discount the following target prices an additional amount (e.g. 10%).

Per U/D, LULU is a BUY under $191/share. BI TAR criterion is met ~ $184 given a forecast high price ~$369 (no dividend).

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ANF Stock Study (9-23-25)

Posted by on December 10, 2024 at 06:39 | Last modified: October 15, 2025 10:01

I recently did a stock study on Abercrombie & Fitch Co. (ANF, $87.77).

M* writes:

     > Abercrombie & Fitch Co is a specialty retailer that sells casual
     > clothing, personal-care products, and accessories for men, women,
     > and children. It sells direct to consumers through its stores
     > and websites, which include the Abercrombie & Fitch, Abercrombie
     > kids, and Hollister brands. Majority stores are in the United
     > States, but the company does have many stores in Canada,
     > Europe, and Asia. All stores are leased. Abercrombie ships to
     > well over 100 countries via its websites. The company sources
     > its merchandise from dozens of vendors that are located in Asia
     > and Central America. Abercrombie has two distribution centers
     > in Ohio to support its North American operations. It uses
     > third-party distributors for sales in Europe and Asia.

Over the past 10 years, this medium-size company has grown sales and earnings at annualized rates of 3.1% and 38.8%, respectively. Lines are generally up and parallel with sales and EPS down in ’17 (references to year from Value Line and BI website incremented by 1 to align with FY ending Jan 31), ’21 (huge drop to negative EPS, which could probably be excluded due to COVID), and ’23. Ten- (Five-) year EPS R^2 is 0.14 (0.35) and Value Line gives an Earnings Predictability score of 10. I think whether this passes visual inspection is debatable.

Over the past decade, PTPM trails peer and industry averages despite increasing from 1.6% (’16) to 15.5% (’25) with a last-5-year mean of 7.1%. ROE also trails peer and industry averages despite increasing from 2.7% (’16) to 43.2% (’25) with a last-5-year mean of 18.2%. Debt-to-Capital is less than the industry and about even with peers while increasing from 20.5% (’16) to 41.6% (’25) with a last-5-year mean of 55.5% (all rentals and leases as company has no long-term debt).

Value Line gives a B+ rating for Financial Strength. Quick Ratio is 0.75 but Interest Coverage is 323 per M* who assigns “Standard” for Capital Allocation (and suggests negatively that balance sheet may be too conservative)

With regard to sales growth:

My 3.0% forecast is at bottom of the range.

With regard to EPS growth:

My 1.0% per year forecast is just below the range of three long-term estimates (mean 4.7%). Initial value is 2026 Q2 EPS of $10.57/share rather than ’25 EPS of $10.69.

My Forecast High P/E is 14.0. Over the past decade, high P/E falls from 55.3 in ’16 to 18.4 in ’25 with a last-5-year mean of 15.7 (excluding NMF and 842 in ’21 and ’23, respectively) and a last-5-year-mean average P/E of 10.9. I am near bottom of the range (only 11.7 in ’22 is lower).

My Forecast Low P/E is 5.0. Over the past decade, low P/E falls from 30.2 in ’16 to 9.5 in ’25 with a last-5-year mean of 6.1 (excluding NMF and 285 in ’21 and ’23, respectively). I am forecasting near bottom of the range (only 3.5 in ’24 are lower).

My Low Stock Price Forecast (LSPF) of $52.90 is default based on initial value given above. This is 39.7% less than previous closing price and 19.1% less than the 52-week low.

These inputs land ANF in the HOLD zone with a U/D ratio of 1.9. Total Annualized Return (TAR) is 12.1%.

PAR (using Forecast Average—not High—P/E) of 3.8% is just under the risk-free rate (T-Bill). If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I usually compare my inputs with those of Member Sentiment (MS) but only six total studies currently show on the website: too small a sample size for comparison.

Value Line’s projected average annual P/E (high EPS) of 10.5 ($12.25) is greater than my 9.5 ($11.11).

These observations along with my inputs near or below respective analyst/historical ranges lead me to believe MOS is robust in the current study.

In doing the study, my gut tells me not to use a Forecast Low P/E of 6.0, which would still be in the lower end of the range. Historical P/E distribution is very spotty, though, with 10 years including one NMF, two triple digits, 3.5, and 5.4. 3.5 seems excessively low for the industry and 5.4 is highly questionable. That leaves only five viable data points with one [maybe two] in the last five years. Not much to go on with high variability necessitates more conservative inputs. 6.0 rather than 5.0 makes for a more reasonable LSPF (closer to 30% less than previous close rather than 40%) and leaves the BUY zone just beneath ($86.40/share). Just too much uncertainty for me to do this, however.

I see several other weaknesses with ANF. EPS projections are very inconsistent with only three available ranging from 1.2% – 10.0%. Sales forecasts are weak. Visual inspection, as mentioned at the top, is choppy. Historical EPS distribution is very wide leading me to question the reliability of a higher initial value ($10.69 in ’25 is 72% YOY growth). Even the stock price is highly volatile falling 48% over the last year while zooming ~400% over the last three years. Quality stock prospects are all about stability; this is not that.

Per U/D, ANF is a BUY under $78.60. Given a forecast high price just under $156, BI TAR criterion is met ~ $78/share.

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