As of April 3, 2026, Designer Brands Inc has a Discounted Cash Flow (DCF) derived fair value of $33.01 per share. With the current market price at $5.92, this represents a potential upside of 457.6%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $26.60 |
| DCF Fair Value (10-year) | $33.01 |
| Potential Upside (5-year) | 349.4% |
| Potential Upside (10-year) | 457.6% |
| Discount Rate (WACC) | 7.2% - 12.0% |
Revenue is projected to grow from $3009 million in 02-2025 to $3926 million by 02-2035, representing a compound annual growth rate of approximately 2.7%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 02-2025 | 3009 | 2% |
| 02-2026 | 2926 | -3% |
| 02-2027 | 3008 | 3% |
| 02-2028 | 3096 | 3% |
| 02-2029 | 3223 | 4% |
| 02-2030 | 3288 | 2% |
| 02-2031 | 3354 | 2% |
| 02-2032 | 3549 | 6% |
| 02-2033 | 3620 | 2% |
| 02-2034 | 3715 | 3% |
| 02-2035 | 3926 | 6% |
Net profit margin is expected to improve from 0% in 02-2025 to 5% by 02-2035, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 02-2025 | (10) | 0% |
| 02-2026 | 21 | 1% |
| 02-2027 | 51 | 2% |
| 02-2028 | 83 | 3% |
| 02-2029 | 118 | 4% |
| 02-2030 | 151 | 5% |
| 02-2031 | 154 | 5% |
| 02-2032 | 163 | 5% |
| 02-2033 | 166 | 5% |
| 02-2034 | 171 | 5% |
| 02-2035 | 180 | 5% |
with a 5-year average of $45 million. Projected CapEx is expected to maintain at approximately 2% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 02-2026 | 48 |
| 02-2027 | 50 |
| 02-2028 | 48 |
| 02-2029 | 47 |
| 02-2030 | 47 |
| 02-2031 | 48 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 3 |
| Days Inventory | 122 |
| Days Payables | 56 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 3M/2026 | 25 | 1 | 11 | (10) | 24 |
| 2027 | 140 | 6 | 45 | 0 | 88 |
| 2028 | 175 | 10 | 47 | 14 | 104 |
| 2029 | 213 | 14 | 49 | 1 | 149 |
| 2030 | 251 | 18 | 50 | 1 | 182 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 26.60 | 349.4% |
| 10-Year DCF (Growth) | 33.01 | 457.6% |
| 5-Year DCF (EBITDA) | 12.77 | 115.8% |
| 10-Year DCF (EBITDA) | 21.16 | 257.4% |
Is Designer Brands Inc (DBI) a buy or a sell? Designer Brands Inc is definitely a buy. Based on our DCF analysis, Designer Brands Inc (DBI) appears to be significantly undervalued with upside potential of 457.6%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $5.92.