Just saw this article this morning. http://www.marketwatch.com/story/ho...ring-monster-returns-to-small-firm-2016-09-25
This seems crazy to me. A valuation of $5 billion? I would like to see how they are coming up with that number. SP500 P/E right now is about 25. That would equate to $200 million in earnings for Yeti if they are valuing Yeti at only an average of the market. Is Yeti actually earning $200 million/year? Even Cortec's purchase in 2012 only valued the company at $100 million (2/3 for $67m). 4 years later, they are saying that the company's value has increased 50 times?! Seems ridiculous, especially given that during the last 4 years, the serious competition has moved in on Yeti. Put this in perspective: Cabela's annual earnings for 2015 was only $189 million. That's for the entire company of Cabela's. Yeti is a small part of their whole company. (Granted Yeti sells in many other places). Seems the same guy pricing the bottle openers at $50 is also pricing the company. Having said that, Yet's proved us all wrong before when we've said, "No one in there right mind would pay THAT!"
There's no way Yeti is worth $5B today. That said, people invest on future returns. I can only imagine Yeti's current profit margins. Those would be very attractive to investors. There will be a lot of research, development and marketing dollars available to Yeti. They are a "boutique" brand, so I suspect a lot of new "boutique" stuff to hit the market. They'll have plenty of money for acquisitions as well. Perhaps they'll acquire some of their competition and market those as a common-man's Yeti, while still capturing market share.
They have to start winning some lawsuits before I would invest money in them. If you have nothing proprietary to sell, brand name will only carry you so far.
$800 per cooler x every man, woman and whatever that might potentially buy a cooler, styrofoam to insulated plastic = Billions and billions of dollars!
I would not invest in them at all. But, I'm not a fan boy either. Some things take off though, especially if you have the coin and management to do so. I think it's pretty impressive actually what Yeti has accomplished so far. The ability to fleece so many people speaks volumes to their boutique marketing and distribution strategy.
I don't think Yeti will be worth $5 billion in 10 years. I just can't get to that valuation. Once the capital comes in, however, it might be interesting to see what they do with their competition. If they can buy out some of these other companies, and structure their product line to staggered price points, they may have a shot at continuing to grow. But, dang, it's a cooler company. It's not Apple or Ford.
Agreed. But with that kind of coin, there's no telling what they'll come up with. Apple used to sell computers, now they sell damn near everything. Google was a search engine, now they are making cars. I'm not saying Yeti is the next Google or Apple, but if they manage it right, there's a lot they can do with that money. I predict they go under in 5 years after their stock price plummets.
