What Does YETI’s Falling Multiple Really Say

For questions about this article or underlying research, email [email protected].

Investors often view a lower price-to-earnings multiple, the amount they pay for each dollar of profit, as the mark of a cheaper stock, and YETI (YETI) seems to fit that rule. In mid-2023, its shares traded at 50.7 times profit over the previous twelve months, and today they trade at 18.2 times. So does a multiple that has fallen this far make YETI stock cheaper?

YETI Stock Rose While Its Multiple Fell

YETI shares cost more today than they did three years ago, not less. The stock price rose 12.2% from mid-2023 to today. Over those years, the company bought back stock, lowering its diluted share count from 87.2 million to 75.8 million. Across that same period, the price went up while the multiple came down.

How Much Has YETI's Profit Grown?

YETI generated $179 million in profit over the latest twelve months, compared with $66.4 million in the twelve months to mid-2023. Profit is now 2.7 times what it was then.

That starting point followed a bad year, with profit falling 66.4% in the twelve months to mid-2023. The subsequent rise has taken profit most of the way back to where it stood in mid-2021 and mid-2022.

Drinkware is YETI's largest business, at 58.1% of its sales in fiscal 2025, and Coolers & Equipment makes up most of the rest. The company's gross margin also rose from 48.3% to 59.2% over those same three years, though the latest figure includes fiscal Q2 2026, when reported gross margin of 66.7% ran well above management's adjusted 59.5%.

Does A Lower Multiple Make YETI Cheaper?

Not in the way the rule assumes. A more useful question asks what buyers were counting on when the multiple was high, and how much of it YETI has since delivered. YETI's multiple peaked at 65.8 at the end of September 2023, marking its highest level for any quarter end in the past five years. Profit today is about 2.8 times what it was then.

Investors paid the most for each dollar of YETI's profit when there was far less of it. They expected that profit to grow, and it did. YETI's multiple followed a curve, sitting highest while the profit was still to come, and moving lower once it showed up.

A buyer today does pay less for each dollar of profit than a buyer in 2023 did. That earlier buyer, however, was paying for a profit recovery that has since happened. The lower multiple shows growth YETI has already delivered, not a lower price for the same prospects.

Where Is YETI On That Curve Now?

YETI's profit came back in a single year, the twelve months to mid-2024, and the twelve-month total has barely moved since. That total fell 5.5% over the following twelve months and rose 0.9% in the latest twelve. YETI's multiple is now below the S&P 500's 22.9.

On a reported basis, profit in fiscal Q2 2026 came in 39% above the same quarter a year earlier. Using management's adjusted measure, though, net income fell 8% to $51 million, meaning the reported jump comes from items management leaves out, and those items also lift the twelve-month profit behind today's 18.2 multiple. YETI's profit growth from here, measured against its growth over the latest twelve months, is the figure to watch, with the next report expected in November 2026.

Is Too Much Of Your Wealth Riding On One Stock?

YETI earns far more than it used to, and its holders still have to decide what that is worth. When one position grows into a large part of your wealth, a sharp fall can hurt your whole plan, and selling to spread the money out can bring a large tax bill. Our partner advisory firm offers a free strategy review of ways to protect a concentrated position and unwind it with less tax.

Request A Free Strategy Review

Spot an error or want more like this? Tell us in 10 seconds.