MGI
MoneyGram International, Inc. New
stock NASDAQ

# The shoe nobody bet on
Picture the most divisive shoe you can think of. The one people always seem to have an opinion about. There is a good chance a listed company makes it, charges a premium for it, and keeps more than half of what you hand over as gross profit before a cent goes anywhere else.
Two companies do exactly that, on exactly that kind of shoe. **Crocs** runs a **58 percent** gross margin on a molded foam clog that has divided opinion since the early 2000s. **Birkenstock** runs **57 percent** on a cork-and-latex sandal it has been shaping, more or less unchanged, since 1774. Same polarizing design. Same margins. Two very different companies. The question worth staying for is not why people buy a polarizing shoe. It is what each company did the moment it understood the design actually worked.
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# The clog that refused to die
Start with the survivor. The Classic Clog should have been a fad, and for a while the market treated **Crocs** as one. Instead the foam held. A proprietary material the company calls *Croslite*, a wall of clip-on Jibbitz charms, and a brand that leaned into its polarizing reputation rather than running from it turned a novelty into a machine. Trailing revenue sits near **4 billion dollars**, and by the company's account international sales are approaching parity with North America, growing at roughly 10 percent a year across China, Japan, India, and Western Europe.
There is a quieter virtue underneath the noise. Over the last several years **Crocs** grew revenue per share at about **16 percent** while headline revenue grew closer to 12 percent, which only happens when a company is steadily buying back its own stock and leaving each remaining share owning more of the business. That is the honest kind of growth, the kind you cannot manufacture by printing new shares.
Then came the swerve. In 2022 **Crocs** paid roughly **2.5 billion dollars** for HEYDUDE, a second casual-shoe brand, betting it could run the single-icon playbook twice. It has not worked yet. By the company's own disclosures HEYDUDE has posted two straight years of double-digit revenue declines, and the drag is visible in the group numbers: reported operating margin over the trailing year fell to about **3 percent**, against a three-year average near 26 percent, and return on invested capital turned negative over the same stretch. The core **Crocs** brand still earns north of 20 percent operating margins. The acquisition simply muddied a story that used to be beautifully, almost defiantly, simple.
Our engine still rates the growth engine respectably (MGI of 50) and reads the price as no particular bargain (MVI of 56). A cash machine, with a distraction bolted to the side.
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# The footbed that took two and a half centuries
Now the company that did the opposite of a swerve. It did nothing.
**Birkenstock** has sold essentially the same contoured cork footbed since 1774, went public on the New York exchange only in October 2023, and has never seriously tried to be more than one idea. The split of the business is deliberately old-fashioned: about **62 percent** through wholesale partners, 38 percent direct to the customer, with the Americas its largest market at 52 percent of sales. Operating margin runs near **25 percent**, and here is the tell, its three-year average is 24 percent. Flat. Boring. Durable. Exactly what the **Crocs** profit line stopped being.
*… (article continues)*
*Read the full article (****free****, no paywalls) at* [https://multibaggerapp.substack.com/p/the-underestimated-shoe-what-a-foam](https://multibaggerapp.substack.com/p/the-underestimated-shoe-what-a-foam)
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*Written the modern way: human research and judgment with AI-assisted drafting. Research information, not investment advice.*

Here's some head-to-head comparison research for you from Multibagger. Let me know if you disagree with any of it strongly, its a WIP:

CAVA is the stronger multibagger candidate on the scores available: its MGI of 69 versus Dutch Bros' 55 and Opportunity score of 67 versus 53 reflect a cleaner financial position, a founder-led management team with a longer track record, and a category-creator moat with no national-scale challenger. Dutch Bros has a higher runway score (83 vs. 78) given its larger unit gap to target, but CAVA's balance sheet carries zero debt against Dutch Bros' roughly $900 million in net obligations including a complex Tax Receivable Agreement, and CAVA's restaurant-level margins near 25% on average unit volumes above $3 million compare favorably to Dutch Bros' shop-level contribution margins near 29% on volumes near $2.1 million once the higher absolute revenue per unit is considered. Both are overpriced relative to their fair value anchors, but the quality differential and financial cleanliness tip the head-to-head toward CAVA.
Dutch Bros generates approximately 92% of revenue through company-operated shop transactions and roughly 8% through royalties, supply sales, and fees from its 325 franchised locations, giving it a small but recurring asset-light income stream alongside its owned-unit base. CAVA is almost entirely company-owned restaurants with no franchise segment, supplemented by a small branded grocery line of dips, spreads, and dressings sold through major retailers that adds a nascent CPG revenue stream. Dutch Bros' franchise segment provides some margin diversification and a capital-light growth option, though the mix is heavily weighted toward company operations. CAVA's grocery presence is early-stage but represents a brand-extension vector that Dutch Bros does not currently have, and CAVA's digital order mix of roughly 35-38% of sales is a more developed channel than Dutch Bros' loyalty-transaction penetration suggests at comparable scale.
Both companies are assessed as overpriced relative to their fair value anchors, and the implied growth requirements explain why. Dutch Bros' fair value anchor sits near $8.5 billion based on roughly 35x FY+2 normalized free cash flow assuming FCF margin expansion toward 10%, while the market at roughly $11.6 billion is pricing approximately 31% annual revenue growth for a full decade — above what the credible geographic expansion case supports. CAVA's fair value anchor is near $6 billion on 35-40x FY2028 free cash flow, while the market at roughly $7.4 billion implies roughly 41% annual revenue compounding for ten years, which the analysis notes is approximately double what a fully bullish unit-growth scenario actually delivers. CAVA trades closer to its fair anchor in percentage terms (roughly 24% above versus Dutch Bros' roughly 36% above), and its value score of 44 is slightly better than Dutch Bros' 42. On runway and TAM saturation, both analyses agree that substantial white space remains but that neither company can sustain the growth rate the market is pricing for a full decade; CAVA's faster operating leverage inflection and debt-free balance sheet make the path to that anchor less dependent on financing conditions.
TLDR: Both are at similar valuations which are slightly on the rich side, not far from fair value. They have slightly different business models that have their own pros and cons, and CAVA is assessed to have slightly better long term growth potential, but it was close, and that's debatable.

# The shoe nobody bet on
Picture the most divisive shoe you can think of. The one people always seem to have an opinion about. There is a good chance a listed company makes it, charges a premium for it, and keeps more than half of what you hand over as gross profit before a cent goes anywhere else.
Two companies do exactly that, on exactly that kind of shoe. **Crocs** runs a **58 percent** gross margin on a molded foam clog that has divided opinion since the early 2000s. **Birkenstock** runs **57 percent** on a cork-and-latex sandal it has been shaping, more or less unchanged, since 1774. Same polarizing design. Same margins. Two very different companies. The question worth staying for is not why people buy a polarizing shoe. It is what each company did the moment it understood the design actually worked.
─────────────────────────
# The clog that refused to die
Start with the survivor. The Classic Clog should have been a fad, and for a while the market treated **Crocs** as one. Instead the foam held. A proprietary material the company calls *Croslite*, a wall of clip-on Jibbitz charms, and a brand that leaned into its polarizing reputation rather than running from it turned a novelty into a machine. Trailing revenue sits near **4 billion dollars**, and by the company's account international sales are approaching parity with North America, growing at roughly 10 percent a year across China, Japan, India, and Western Europe.
There is a quieter virtue underneath the noise. Over the last several years **Crocs** grew revenue per share at about **16 percent** while headline revenue grew closer to 12 percent, which only happens when a company is steadily buying back its own stock and leaving each remaining share owning more of the business. That is the honest kind of growth, the kind you cannot manufacture by printing new shares.
Then came the swerve. In 2022 **Crocs** paid roughly **2.5 billion dollars** for HEYDUDE, a second casual-shoe brand, betting it could run the single-icon playbook twice. It has not worked yet. By the company's own disclosures HEYDUDE has posted two straight years of double-digit revenue declines, and the drag is visible in the group numbers: reported operating margin over the trailing year fell to about **3 percent**, against a three-year average near 26 percent, and return on invested capital turned negative over the same stretch. The core **Crocs** brand still earns north of 20 percent operating margins. The acquisition simply muddied a story that used to be beautifully, almost defiantly, simple.
Our engine still rates the growth engine respectably (MGI of 50) and reads the price as no particular bargain (MVI of 56). A cash machine, with a distraction bolted to the side.
─────────────────────────
# The footbed that took two and a half centuries
Now the company that did the opposite of a swerve. It did nothing.
**Birkenstock** has sold essentially the same contoured cork footbed since 1774, went public on the New York exchange only in October 2023, and has never seriously tried to be more than one idea. The split of the business is deliberately old-fashioned: about **62 percent** through wholesale partners, 38 percent direct to the customer, with the Americas its largest market at 52 percent of sales. Operating margin runs near **25 percent**, and here is the tell, its three-year average is 24 percent. Flat. Boring. Durable. Exactly what the **Crocs** profit line stopped being.
*… (article continues)*
*Read the full article (****free****, no paywalls) at* [https://multibaggerapp.substack.com/p/the-underestimated-shoe-what-a-foam](https://multibaggerapp.substack.com/p/the-underestimated-shoe-what-a-foam)
─────────────────────────
*Written the modern way: human research and judgment with AI-assisted drafting. Research information, not investment advice.*

Here's some head-to-head comparison research for you from Multibagger. Let me know if you disagree with any of it strongly, its a WIP:

CAVA is the stronger multibagger candidate on the scores available: its MGI of 69 versus Dutch Bros' 55 and Opportunity score of 67 versus 53 reflect a cleaner financial position, a founder-led management team with a longer track record, and a category-creator moat with no national-scale challenger. Dutch Bros has a higher runway score (83 vs. 78) given its larger unit gap to target, but CAVA's balance sheet carries zero debt against Dutch Bros' roughly $900 million in net obligations including a complex Tax Receivable Agreement, and CAVA's restaurant-level margins near 25% on average unit volumes above $3 million compare favorably to Dutch Bros' shop-level contribution margins near 29% on volumes near $2.1 million once the higher absolute revenue per unit is considered. Both are overpriced relative to their fair value anchors, but the quality differential and financial cleanliness tip the head-to-head toward CAVA.
Dutch Bros generates approximately 92% of revenue through company-operated shop transactions and roughly 8% through royalties, supply sales, and fees from its 325 franchised locations, giving it a small but recurring asset-light income stream alongside its owned-unit base. CAVA is almost entirely company-owned restaurants with no franchise segment, supplemented by a small branded grocery line of dips, spreads, and dressings sold through major retailers that adds a nascent CPG revenue stream. Dutch Bros' franchise segment provides some margin diversification and a capital-light growth option, though the mix is heavily weighted toward company operations. CAVA's grocery presence is early-stage but represents a brand-extension vector that Dutch Bros does not currently have, and CAVA's digital order mix of roughly 35-38% of sales is a more developed channel than Dutch Bros' loyalty-transaction penetration suggests at comparable scale.
Both companies are assessed as overpriced relative to their fair value anchors, and the implied growth requirements explain why. Dutch Bros' fair value anchor sits near $8.5 billion based on roughly 35x FY+2 normalized free cash flow assuming FCF margin expansion toward 10%, while the market at roughly $11.6 billion is pricing approximately 31% annual revenue growth for a full decade — above what the credible geographic expansion case supports. CAVA's fair value anchor is near $6 billion on 35-40x FY2028 free cash flow, while the market at roughly $7.4 billion implies roughly 41% annual revenue compounding for ten years, which the analysis notes is approximately double what a fully bullish unit-growth scenario actually delivers. CAVA trades closer to its fair anchor in percentage terms (roughly 24% above versus Dutch Bros' roughly 36% above), and its value score of 44 is slightly better than Dutch Bros' 42. On runway and TAM saturation, both analyses agree that substantial white space remains but that neither company can sustain the growth rate the market is pricing for a full decade; CAVA's faster operating leverage inflection and debt-free balance sheet make the path to that anchor less dependent on financing conditions.
TLDR: Both are at similar valuations which are slightly on the rich side, not far from fair value. They have slightly different business models that have their own pros and cons, and CAVA is assessed to have slightly better long term growth potential, but it was close, and that's debatable.