DECK Stock Study (10-16-25)

I recently did a stock study on Deckers Outdoor Corp. (DECK, $96.44).

M* writes:

     > Founded in 1973, California-based Deckers designs and sells
     > casual and performance footwear, apparel, and accessories.
     > In fiscal 2025, Ugg and Hoka accounted for 51% and 45% of
     > total sales, respectively. The firm also markets niche brands
     > Teva and Ahnu. Deckers produces most of its sales through
     > wholesale partnerships but also operates e-commerce in more
     > than 50 countries and about 180 company-operated stores. It
     > generated 64% of its fiscal 2025 sales in the United States.

Since 2018, this medium-size company has grown sales and EPS at annualized rates of 15.8% and 34.3%, respectively (earlier years excluded due to small EPS mathematically distorting growth rate). Lines are up, straight, and parallel. Value Line (VL) gives an Earnings Predictability rating of 90.

Since 2018 (FY ends 3/31; reference to year at BI website and VL incremented to match), PTPM leads peer and industry averages while increasing from 11.6% to 24.9% in ’25 with a last-5-year mean of 20.7%. ROE leads peers but trails the industry while increasing from 10.6% to 36.1% in ’25 with a last-5-year mean of 30.6%. The company has no long-term debt and is therefore lower than peers and the industry on Debt-to-Capital with a last-5-year mean of 11.9% (rentals).

Quick Ratio is 2.02 and Interest Coverage is 374 (consistent with no long-term debt) per M* who assigns a “Narrow” Economic Moat, gives an “Exemplary” rating for Capital Allocation, and offers a B grade for Financial Health. VL rates the company A for Financial Strength.

With regard to sales growth:

• YF projects YOY 9.5% and 7.9% for ’26 and ’27, respectively (based on 24 analysts).
• Zacks projects YOY 9.0% and 7.0% per year for ’26 and ’27, respectively (8 analysts).
• VL projects 9.6% annualized growth from ’25-’30.
• CFRA projects 7.3% YOY and 7.9% per year for ’26 and ’25-’27, respectively.
• M* gives a 2-year ACE of 8.9% annualized growth and projects 8.0% over the next decade in its analyst note.

My 7.0% forecast is below the range.

With regard to EPS growth:

• MarketWatch projects annualized growth of 8.1% and 9.6% for ’25-’27 and ’25-’28 (based on 27 analysts).
• Nasdaq.com gives ACE of 8.4% YOY and 8.6% per year for ’27 and ’26-’28 (9 / 9 / 2 analysts for ’26 / ’27 / ’28).
• Seeking Alpha projects 4-year annualized growth of 4.6%.
• Finviz gives 5-year ACE of 7.4% per year (4).
• Argus projects 5-year annualized growth of 10.0%.
• LSEG gives LTG projection of 5.8%.
• YF projects YOY 0% and 9.7% for ’26 and ’27, respectively (21).
• Zacks projects YOY 0.2% contraction and 7.9% growth for ’26 and ’27 (9) along with 5-year annualized growth of 4.1%.
• VL projects 7.9% annualized growth from ’25-’30.
• CFRA projects growth of 2.7% YOY and 3.3% per year for ’26 and ’25-’27 along with a 3-year CAGR of +6.0%.
• M* projects long-term annualized growth of 9.2%.

My 4.0% per year forecast is below the long-term-estimate range (mean of seven: 7.0%). My initial value will be ’25 EPS of $6.33/share rather than 2026 Q1 $6.52 (annualized).

My Forecast High P/E is 20.0. Since 2018, high P/E increases from 27.6 to 35.4 in ’25 for a last 5-year mean of 29.0 and last 5-year-mean average P/E of 21.1. I am forecasting well below the range.

My Forecast Low P/E is 9.0. Since 2018, low P/E ranges from 8.2 in ’20 to 17.0 in ’25 with a last-5-year mean of 13.1. I am forecasting below the range and current P/E (14.8).

My Low Stock Price Forecast (LSPF) is $67.00. Default ($57.00) based on initial value given above seems unreasonably low at 40.9% (39.2%) less than the previous close (52-week low). My arbitrary selection is 30.5% (28.5%) less, respectively, and 5.2% less than the 2023 low price.

These inputs land DECK in the HOLD zone with a U/D ratio of 2.0. Total Annualized Return (TAR) is 9.8%.

PAR (using Forecast Average—not High—P/E) is less than the current risk-free rate (T-bills) at 3.0%. If a healthy margin of safety (MOS) anchors this study, then I can proceed based on the TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 177 studies done in the past 90 days (my study and 53 other outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 9.0%, 8.6%, 24.6, and 13.0. I am lower across the board. VL projects a future average annual P/E of 20.0, which is higher than MS (18.8) and much higher than mine (14.5).

MS high / low EPS are $9.80 / $6.49 versus my $7.70 / $6.33 (per share). My high EPS is lower due to a lower growth rate. Value Line’s high EPS is in the middle at $9.25.

MS LSPF of $83.00 implies a Forecast Low P/E of 12.8: less than the above-stated 13.0. MS LSPF is 1.6% less than the default $6.49/share * 13.0 = $84.37 resulting in more conservative zoning. MS LSPF is still 23.9% greater than mine.

I believe MOS is robust in this study because my inputs are below respective analyst/historical ranges and MS averages. MS TAR of 17.5% is 7.7% per year greater than mine.

With regard to valuation, PEG is 4.1 and 3.6 per Zacks and my projected P/E, respectively: significantly overvalued (0.48 per M* suggests undervalued, however). Relative Value [(current P/E) / 5-year-mean average P/E] is cheap at 0.70.

Per U/D, DECK is a BUY under $88/share. BI TAR criterion is met ~ $77 given a forecast high price ~$154 (no dividend).

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