SHOO

We rate STEVEN MADDEN, LTD. (SHOO) as a Hold with a composite score of 54.7/100 at a current price of $37.34. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in quality (64th percentile) and momentum (59th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (28th percentile) and stability (49th percentile) tempers our overall conviction. We assign a Narrow Moat rating (52/100), High uncertainty, and Poor capital allocation.

Key items to watch: balance sheet deleveraging progress; sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

STEVEN MADDEN, LTD. holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 54.7/100 places it at rank #1307 in our full 7,333-stock universe. At $2.4B in market capitalization, STEVEN MADDEN, LTD. is a mid-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 28%, though momentum at the 59th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 41% (-1.4pp vs sector) narrow to operating margins of 5% (+3.5pp vs sector) and net margins of 3.2%, yielding a gross-to-net conversion rate of 8%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.

At a current price of $37.34, STEVEN MADDEN, LTD. is trading near fair value based on current fundamentals. Our value factor score of 57/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 35.8x (a 61% premium to the sector median of 22.3x), EV/EBITDA of 24.3x (at a premium), P/B of 3.3x, P/S of 1.2x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a High uncertainty rating to STEVEN MADDEN, LTD.. Key risk factors include elevated market sensitivity (beta of 1.46), significant leverage (126% debt-to-equity), the combination of leverage (126% D/E) and thin margins (3.2% net) amplifies downside risk. The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: elevated market sensitivity (beta of 1.46); significant leverage (126% debt-to-equity); the combination of leverage (126% D/E) and thin margins (3.2% net) amplifies downside risk. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 49th percentile and quality factor at the 64th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 41% provide a buffer against cost pressures; a 2.51% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.

We rate STEVEN MADDEN, LTD.'s capital allocation as Poor. Key concerns include suboptimal returns on capital. Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — STEVEN MADDEN, LTD. significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.

Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.

In summary, STEVEN MADDEN, LTD. receives a Hold rating with a composite score of 54.7/100 (rank #1307 of 7,333). Our quantitative framework assigns a Narrow Moat (52/100, trend: stable), High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 51/100.

Our analysis supports a neutral stance on STEVEN MADDEN, LTD.. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.