One-glance verdict
Undervalued
$54.29 our estimate vs market $30.09
Wall Street consensus: $45.00 (-17.1% lower than our fair-value estimate)
45% below our estimate, below the bear case
Fundamentals snapshot
Build-A-Bear Workshop, Inc.
BBW · NYQ · Consumer Cyclical · Specialty Retail
Current price
$30.09
52-week range
$23.19 - $72.19
Market cap
$370.63M
Balance sheet
Watch
82.93x Strong cushion
Net debt $111.91M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Returns 32.8% on equity, ahead of 66% of its peers.
- Reward Free cash flow was positive in 8/10 years.
- Risk Net debt grew 126.9% over 3 years.
- Risk Forward P/E (7.6x) is higher than trailing (7.4x) - earnings are expected to drop.
What this company does
Build-A-Bear Workshop, Inc.
Build-A-Bear Workshop sells make-your-own stuffed animals and related accessories, with money coming from both physical stores and online sales. This approach, focusing on a fun, in-person experience alongside digital convenience, helps them reach more customers and generate sales.
How the company got here
Build-A-Bear Workshop was founded in 1997 by Maxine Clark, who was inspired by a child's suggestion to create a place where kids could make their own stuffed animals. She envisioned an "experiential retail" (shopping that's more about the experience than just buying a product) destination, a concept that was quite new at the time. The first store opened in St. Louis, Missouri, and the idea quickly caught on, leading to rapid expansion. The company went public in 2004, allowing it to raise more capital for growth and further develop its unique business model. Over the years, Build-A-Bear has evolved from a mall-based store to a multi-channel brand, adapting to changing retail landscapes.
What it actually does
At its core, Build-A-Bear Workshop allows customers, primarily children, to create their own personalized stuffed animals. The experience involves choosing a stuffed animal, adding stuffing, selecting a "heart ceremony" (a symbolic step where a heart is placed inside the animal), and then customizing it with sounds, scents, clothing, and accessories. This interactive process turns the purchase of a toy into a memorable event, differentiating it from simply buying a pre-made stuffed animal off a shelf. The company offers a wide variety of animals, outfits, and accessories, including many based on popular licensed characters.
Direct-to-Consumer
This is the largest part of Build-A-Bear's business, where the company sells its products and experiences directly to customers. It includes sales from its own physical stores, which are designed to be interactive "workshops," and through its e-commerce websites. This segment is where most customers have their hands-on experience of choosing, stuffing, and customizing their furry friends. Revenue here comes from the sale of the stuffed animals themselves, as well as the wide array of clothing and accessories that customers can purchase to personalize their creations.
Commercial
The Commercial segment involves Build-A-Bear generating revenue by working with other businesses. This includes selling products on a wholesale basis, meaning they sell in bulk to other companies that then resell them. It also involves "licensing" their "intellectual property" (IP), which refers to the company's unique brands, characters, and concepts. By licensing its IP, Build-A-Bear allows other companies to use its brand for their own products or services, creating an additional stream of income without the company having to produce or sell the items directly.
International Franchising
Through its International Franchising segment, Build-A-Bear expands its global reach by partnering with businesses in other countries. These franchise partners pay fees and royalties to operate Build-A-Bear Workshop stores using the company's established brand and business model. This allows Build-A-Bear to grow its presence in new markets without the significant investment required to open and manage stores directly in those regions. The company also sells products and supplies to these international franchisees, contributing to revenue.
What management is betting on now
Build-A-Bear's current strategy focuses on evolving its unique retail experience and expanding its reach beyond traditional malls. Management is investing in "omnichannel" (offering a seamless customer experience across different sales channels like online and in-store) initiatives to enhance its digital presence and make the online creation process more engaging. They are also diversifying the company's physical footprint by opening stores in non-traditional locations like tourist spots and cruise ships, and expanding its portfolio of popular licensed products to appeal to a broader audience, including adults and collectors. The goal is to grow revenue and maintain strong "profitability" (the ability to make more money than is spent) by leveraging the brand's appeal across multiple channels and formats.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q4
$11.29M
FY2026 Q1
$9.77M
FY2026 Q2
$24.90M
FY2026 Q3
$849.00K
FY2026 Q4
$1.70M
FY2027 Q2
$14.36M
FY2027 Q3
$-3.63M
Revenue
$115.29M
Net income
$8.76M
Diluted EPS
0.70
Operating cash flow
$4.92M
Free cash flow
$-3.63M
Fetching…
Sources
Revenue
$125.27M
Net income
$18.30M
Diluted EPS
1.45
Operating cash flow
$21.22M
Free cash flow
$14.36M
Fetching…
Sources
Revenue
$122.68M
Net income
$8.12M
Diluted EPS
0.62
Operating cash flow
$8.24M
Free cash flow
$1.70M
Fetching…
Sources
Revenue
$124.25M
Net income
$12.37M
Diluted EPS
0.94
Operating cash flow
$4.21M
Free cash flow
$849.00K
Fetching…
Sources
Revenue
$128.40M
Net income
$15.32M
Diluted EPS
1.17
Operating cash flow
$27.80M
Free cash flow
$24.90M
Fetching…
Sources
Revenue
$150.45M
Net income
$21.68M
Diluted EPS
1.61
Operating cash flow
$19.51M
Free cash flow
$9.77M
Fetching…
Sources
Revenue
$119.43M
Net income
$9.87M
Diluted EPS
0.73
Operating cash flow
$15.16M
Free cash flow
$11.29M
Fetching…
Sources
Is it cheap or expensive?
Fair value $54.29 vs current price $30.09
Wall Street consensus is the average analyst price target: $45.00 (-17.1% lower than our fair-value estimate).
Our most-likely fair value is $54.29 a share — about 80.5% above today's price of $30.09, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $111.9M. Interest coverage 82.9x.
Net debt
$111.91M
Interest coverage
82.93x
Build-A-Bear Workshop, Inc.'s profit covers its interest bill about 82.9 times over. which is stronger than every peer shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Watch
Worse cushion
Baseline
Better cushion
BBW
BASELINE
Build-A-Bear Workshop, Inc.
Total debt $125.51M Interest coverage 82.93x This is the baseline the peer rows are being compared against.
Total debt $43.11M Interest coverage 30.19x -64% vs BBW Carries about 2.7x less debt cushion than BBW.
Total debt $253.97M Interest coverage -2.37x -100% vs BBW This peer has almost no interest-payment cushion compared with BBW.
Total debt $2.66B Interest coverage 4.60x -94% vs BBW Carries about 18.0x less debt cushion than BBW.
Total debt $3.85B Interest coverage 6.47x -92% vs BBW Carries about 12.8x less debt cushion than BBW.
Total debt $364.50M Interest coverage -4.83x -100% vs BBW This peer has almost no interest-payment cushion compared with BBW.
What you should know
The case for and against BBW
3 Rewards
3 Risks
Rewards
-
Returns 32.8% on equity, ahead of 66% of its peers.
-
Free cash flow was positive in 8/10 years.
-
Trades at 7.4x P/E vs peer median 15.4x (51.7% cheaper).
Risks
-
Net debt grew 126.9% over 3 years.
-
Forward P/E (7.6x) is higher than trailing (7.4x) - earnings are expected to drop.
-
Operating margin compressed from 13.2% to 9.6% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
7.45x
Forward P/E
7.62x
P/B
2.31x
P/S
0.72x
EV/EBITDA
6.68x
PEG ratio
0.43x
Profitability
How much profit each dollar creates
Gross margin
54.7%
Operating margin
9.6%
Net margin
10.0%
ROE
32.8%
ROA
10.4%
Health
Liquidity and balance-sheet strength
Debt / equity
0.79x
Current ratio
1.60x
Quick ratio
0.39x
Total debt
$125.51M
Total cash
$13.60M
Growth
How the business has been compounding
Revenue TTM
$517.75M
Revenue 5Y CAGR
6.5%
EPS TTM
4.04
EPS 5Y CAGR
8.2%
Cash flow
How much cash the business throws off
Operating CF TTM
$59.18M
Free CF TTM
$39.51M
FCF margin
7.6%
Dividend
Shareholder payout
Yield
3.1%
Payout ratio
22.3%
Last ex-div date
2026-09-24