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Investing.com - DA Davidson raised its price target on Build-A-Bear Workshop (NYSE:BBW) to $64.00 from $60.00 on Monday, while maintaining a Buy rating on the stock. The company, currently trading at $50.85 with a P/E ratio of 12.14, has delivered an impressive 98.2% return over the past year. According to InvestingPro analysis, the stock appears slightly overvalued at current levels.
The research firm cited significant international growth potential for the specialty retailer, particularly through partner-operated store models that have shown recent success in markets like Italy. The company’s strong financial position, evidenced by a "GREAT" Financial Health score on InvestingPro, supports its expansion plans with moderate debt levels and liquid assets exceeding short-term obligations.
DA Davidson’s analysis identified approximately 1,600 toy stores across the five largest European economies that could serve as potential partnership opportunities for Build-A-Bear Workshop.
The firm estimates that when extrapolated to all of Europe, there could be around 3,000 toy stores, suggesting Build-A-Bear Workshop has the potential to quadruple its number of international partner-operated locations.
The new $64 price target represents a multiple of 14 times DA Davidson’s increased earnings per share forecast for fiscal 2026, with the firm describing Build-A-Bear Workshop as "an open-ended growth story globally."
In other recent news, Build-A-Bear Workshop reported first-quarter results for 2025 that exceeded both earnings and revenue expectations. The company achieved an earnings per share of $1.17, surpassing the projected $0.87, while total revenue reached $128.4 million, outpacing the anticipated $119.05 million. These results demonstrated robust performance across all segments and an increase in gross margin due to fewer discounts. Analysts at DA Davidson responded positively, with Michael Baker raising the price target for Build-A-Bear Workshop to $60 from $50, maintaining a Buy rating. The firm further adjusted its price target to $64, highlighting the company’s international growth potential, particularly in Italy. Build-A-Bear’s asset-light store model and the introduction of the Mini Beans product line are expected to contribute to future profitability. The company’s strategy of expanding through partner-operated stores continues to show promise, especially in international markets. These developments reflect a strong outlook for Build-A-Bear Workshop as it diversifies and expands its market presence.
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