Martin Poole When it comes to the shoe industry, there aren't very many publicly traded companies for investors to choose from. With a market capitalization of $3.16 billion, Steven Madden ( NASDAQ: SHOO ) is not exactly a massive player in the space.
But it's certainly not small either. In the past, I have been quite bullish about the firm. Unfortunately, since I last reaffirmed my ‘buy’ rating for the stock back in January 2023, the firm has underperformed the broader market.
Admittedly, the increase in price has been a rather robust 28.5%. While it falls quite a bit short of the 36.
5% increase seen by the S&P 500 over the same window of time. This is not to say that things have been awful. Since I originally rated the company a ‘buy’ in September 2022, shares are still outperforming the broader market, trading up 52.
5% compared to the 45% increase the S&P 500 has experienced. For this year, management has some high hopes for the business, particularly when it comes to revenue growth. However, the stock has become more or less fairly valued at this point in time.
In fact, relative to similar firms, the stock is even a bit pricey. Given this and in spite of the anticipation of further upside from a revenue perspective, I think it's appropriate to downgrade the company to a ‘hold’. Time to take a step back As I mentioned already, Steven Madden operates in the footwear industry.
Management describes the company as a fashion-forward brand and private label footwear .