Taking a look at Steven Madden, Ltd. (NASDAQ:SHOO)’s valuation level, we can focus on several ratios. One of the quickest ways to determine the projected value of a stock is the price to earnings growth, or PEG ratio.
This formula was popularized by Peter Lynch and according to his calculations, a stock which is fairly valued will have a price to earnings ratio equal to its rate of growth. Simply put, a stock with a PEG ratio of 1 would be considered fairly valued. A stock with a ratio of under 1.0 would be undervalued and a stock with a PEG over 1.0 would be considered over valued. Steven Madden, Ltd. currently has a PEG ratio of 2.53.Even with the stock market still riding high, investors may be looking for some bargain stocks to add to the portfolio. Although nobody can say for certain if stocks will continue to climb the ladder, investors may be preparing for the temporary dips in order to get into some positions at more reasonable prices. Always being prepared can help make the tough decisions a bit easier to stomach when the time comes. Coming at the stock market from multiple angles may help investors spot some future winners.
Most importantly investors want to know where the stock is headed from here. In order to get a sense of Wall Street sentiment, we can look to equity research analyst estimates. On a one to five ratings scale where 1.0 indicates a Strong Buy, 2.0 indicates a Buy, 3.0 a Hold, 4.0 a Sell and 5.0 a Stong Sell. Steven Madden, Ltd. (NASDAQ:SHOO) currently has an average analyst recommendation of 2.70 according to analysts. This is the average number based on the total brokerage firms taken into consideration by Beta Systems Research. The same analysts have a future one-year price target of $40.90 on the shares.
In addition to sell-side rational, we can also take a look at some technical indicators. The stock is currently 17.72% away from its 50-day simple moving average and 23.94% away from the 200 day average. Based on a recent trade, the shares are -0.41% away from the 52-week high and 48.21% from the 52-week low. The RSI (Relative Strength Index), which shows price strength by comparing upward and downward close to close movements.
An RSI approaching 70 is typically deemed to be nearing overbought status and could be ripe for a pullback. Alternatively an RSI nearing 30 indicates that the stock could be getting oversold and might be considered undervalued. The RSI for Steven Madden, Ltd.(NASDAQ:SHOO) currently stands at 80.14.
Steven Madden, Ltd. has posted trailing 12 months earnings of $1.63 per share. The company has seen a change of 18.70% earnings per share this year. Analysts are predicting 8.05% for the company next year. The firm is yielding 11.50% return on assets and 16.30% return on equity.
Individual investors may tend to become more bullish at market tops and more bearish at the bottoms. This goes against the buy low sell high mantra that is widely preached in the investing community. The two emotions that come into play here are greed and fear. Investors tend to get greedy when they see stocks flying to new highs. It can be very tempting to get in on a name that has been running hot for a time. On the other side of the coin, investors often get fearful when the market is tanking. The fear of losing becomes prevalent when this occurs, and investors may be tempted to sell like the rest. Although this goes against logic, many investors will still end up buying high and selling low.