On Everyone’s Feet, But Not In Your Portfolio? The Investment Case for Birkenstock (BIRK)

During a recent trip through Croatia, Birkenstocks seemed to be everywhere. That alone isn't an investment thesis, but it made me take a closer look at the company.
A few things stand out to me:

The brand appears stronger than ever.

Customers routinely pay $120-200 for what are essentially premium sandals.

The company continues to expand globally while maintaining exceptionally high gross margins of around 57%.That’s pretty impressive for a shoe company

The stock is no longer trading at IPO valuation multiples, with the P/E ratio having fallen from above 40x to around 20x.

What I find interesting is the disconnect between the apparent strength of the brand and the lack of investor enthusiasm.
Of course, there are risks. Debt has been one of my biggest concerns, although management appears to be making steady progress in reducing leverage. On top of that, the company recently announced a $250 million share buyback program, which could be interpreted as a sign that management believes the stock is undervalued at current levels.
What strengthens my conviction is that Birkenstock is still guiding for 13 to 15% revenue growth despite concerns about tariffs and a slowing consumer environment.
The company currently generates an ROIC of roughly 9 to 10%. If Birkenstock can maintain gross margins around 57% while continuing to reduce debt, I would expect returns on invested capital to improve over time. Combined with double digit revenue growth and strong pricing power, that could make the current valuation look quite attractive.

Follow the Money: Massive Insider Buying
What strengthens my conviction even further is the strong alignment of interest. In late February 2026, Christian Birkenstock (via CB Beteiligungs) made a massive insider purchase, buying 2.8 million shares for roughly $117.8 million out of his own personal funds. When both the management (via the $250M accelerated buyback) and the founding family are aggressively buying the stock at these levels, it shows a profound conviction that the market is mispricing the company.

Am I missing something here?