YETI Holdings, Inc. (YETI) stock intrinsic value fair value estimate & owner earnings analysis

YETI sells premium coolers and equipment (2025 net sales of $748.5 million) and drinkware (tumblers, bottles and mugs; $1,085.8 million), plus a small other category, for total 2025 net sales of $1,868.5 million. About 60% of sales ($1,127.8 million) come through its own direct-to-consumer channels and the rest ($740.7 million) through wholesale. No single customer was 10% or more of gross sales. The United States is about 79% of sales; International was $394.4 million in 2025, up from $339.4 million in 2024 and $259.8 million in 2023. How we measure earnings. We start from cash generated by operations, remove swings in working capital (inventory, receivables, payables and taxes), deduct stock-based compensation as a real cost, and deduct only the capital spending needed to maintain the business. On that basis owner earnings were about $206.7 million in 2025, $191.6 million in 2024, $190.7 million in 2023, $206.7 million in 2021 and $174.8 million in 2020. 2022 was only $92.2 million: working capital swung heavily (inventory rose $91.6 million and payables fell) and the company recorded a $97.2 million product recall charge. We treat product-recall accruals as working-capital timing. We measure from 2020 and leave out 2018 and 2019 (a different capital structure, with $151.8 million of debt repaid in 2018, and stock compensation of $52.3 million in 2019 versus $9.0 million in 2020) and 2022 (the recall year). The median of 2020, 2021, 2023, 2024 and 2025 is $191.6 million, our earning-power anchor. Two things are not deducted: the roughly $59 million spent in 2025 on additions of intangibles, which the company says is mainly patent and trademark defense costs net of settlements, plus the purchase of the Helimix shaker bottle brand; and the $36.2 million business acquisition in 2024. If IP legal spending proved a permanent annual cost of that size, owner earnings would be materially lower, which the bear case allows for. Per share, we divide by the 75.8 million diluted shares reported for the second quarter of 2026, down from 81.6 million for 2025 as the company repurchased stock (about $300 million in 2025). Debt is small: $73.8 million of Term Loan A at January 3, 2026 and nothing drawn on the revolver. Growth check. Owner earnings grew about 8% in 2025 ($206.7 million versus $191.6 million), and the base case assumes 0% in year 1. Recent results support the level: in the first half of 2026 net sales were $864.3 million versus $797.0 million a year earlier (up 8.4%; second quarter up 8.5%), net income $81.2 million versus $67.8 million, and first-half cash from operations was $29.8 million versus a $19.1 million outflow. Base case, $30.8 per share. Owner earnings stay flat at $191.6 million for ten years, then erode 5% a year. We give no credit for growth. The company has grown sales every year since 2018, but we do not count growth that depends on new products, new markets or share gains, and the pace slowed to 2.1% in 2025. We credit the persistence of the brand's demonstrated earning power (eight years of positive owner earnings through the 2022 recall and the 2025 tariff year) but do not extend it indefinitely. Bear case, $11.0 per share. Owner earnings fall to $92 million, the level of the recall and inventory year 2022, decline 3% a year for ten years and 8% a year afterwards. The named risks are those in the filing: in 2025 the cost of importing products into the United States rose and the company says this had a material negative impact on gross margins; the Supreme Court invalidated the tariffs imposed under the emergency-powers law (IEEPA) on February 20, 2026, but new tariffs were started under other authorities and refund recovery is uncertain; product recalls recurred (recall charges of $1.9 million in 2023, $9.9 million in 2024 and $2.9 million in 2025); and IP defense costs could persist. Bull case, $52.0 per share. Owner earnings grow 5% a year for ten years, staying below the 2018-2025 pace of sales growth, then hold flat for ten years and erode 5% a year. The named lever is International, which grew 31% in 2024 and 16% in 2025 while the U.S. was slightly down in 2025. This case needs that international momentum to continue. What could make this wrong: consumers trading down from premium-priced products, tariff costs that cannot be offset with pricing, or brand fatigue would push results toward the bear case. Lower tariffs or refunds would help, but we do not count them. The share repurchase is not credited as growth in value; it is only reflected in the lower share count. The margin-of-safety price is set well below the base case, because these earnings depend on a consumer brand and on an import-heavy supply chain exposed to tariffs.