YETI Holdings, Inc. engages in the design, marketing, and distribution of products for the outdoor and recreation market. Its products include coolers, drinkware, travel bags, backpacks, multipurpose buckets, outdoor chairs, blankets, dog bowls, apparel, and accessories. The company was founded by Roy J. Seiders and Ryan R. Seiders in 2006 and is headquartered in Austin, TX.
YETI Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for YETI Holdings Inc. To summarize, we found that YETI Holdings Inc ranked in the 26th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. The most interesting components of our discounted cash flow analysis for YETI Holdings Inc ended up being:
The company's debt burden, as measured by earnings divided by interest payments, is 6.77 -- which is good for besting 72.49% of its peer stocks (US stocks in the Consumer Cyclical sector with positive cash flow).
92% of the company's capital comes from equity, which is greater than 80.73% of stocks in our cash flow based forecasting set.
The business' balance sheet suggests that 8% of the company's capital is sourced from debt; this is greater than just 19.23% of the free cash flow producing stocks we're observing.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Cyclical that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as YETI, try SYPR, DNKN, IGT, RH, and AXL.
This article was highlighted for PRO subscribers, Seeking Alpha's service for professional investors. Find out how you can get the best content on Seeking Alpha here. The COVID-lockdowns have upended the travel and vacation economy. Many Americans canceled their summer vacation abroad and instead opted for a quieter local outdoor...
Harrison Schwartz on Seeking Alpha | September 17, 2020