Company Performance - Deckers (DECK) closed at $106.13, with a slight increase of +0.1% from the previous session, outperforming the S&P 500's loss of 0.23% [1] - Over the past month, Deckers' shares have declined by 16.34%, which is worse than the Retail-Wholesale sector's loss of 11.71% and the S&P 500's loss of 12.13% [1] Earnings Forecast - The upcoming earnings disclosure for Deckers is anticipated, with projected earnings per share (EPS) of $0.55, representing a 33.73% decrease from the same quarter last year [2] - Revenue is forecasted to be $992.79 million, indicating a growth of 3.44% compared to the same quarter of the previous year [2] Analyst Estimates - Recent adjustments to analyst estimates for Deckers are crucial as they reflect changing business trends, with positive revisions indicating a favorable outlook on the company's health and profitability [3] Zacks Rank and Valuation - Deckers currently holds a Zacks Rank of 2 (Buy), with a track record of superior performance, where 1 stocks have averaged an annual return of +25% since 1988 [5] - The Forward P/E ratio for Deckers is 16.07, which is a premium compared to the industry average of 12.51, and the PEG ratio stands at 1.06, compared to the industry average of 1.22 [6] Industry Context - The Retail - Apparel and Shoes industry, part of the Retail-Wholesale sector, has a Zacks Industry Rank of 168, placing it in the bottom 33% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Company Performance - Deckers Outdoor Corporation (DECK) has experienced a significant decline in its stock price, dropping 25.9% over the past month, which is worse than the Zacks Retail-Apparel and Shoes industry's decline of 7.9% and the S&P 500's decline of 3.3% [1][4] - The stock closed at $100.88, nearly 55% below its 52-week high of $223.98 reached on January 30, 2025, and is trading below its 50 and 200-day moving averages, indicating bearish sentiment [6][9] Revenue and Growth Challenges - The decline in DECK's stock price is attributed to slowing growth and increased competition in the footwear and accessories market, with revenue deceleration due to inventory constraints affecting key brands like UGG [4][13] - Management anticipates a 13.2% decline in UGG sales in the fourth quarter, contrasting with a 16.1% year-over-year growth in the third quarter, leading to an expected overall sales growth deceleration to 1% in the fourth quarter from 17.1% in the third quarter [14][16] Cost and Margin Pressures - SG&A expenses rose 24.9% year-over-year to $535.3 million in the fiscal third quarter, driven by increased marketing spend and an expanded workforce, which is expected to pressure the company's operating margin [17] - Increased markdowns and promotional activities, particularly for HOKA, along with higher freight costs and foreign exchange pressures, are anticipated to further impact profitability [16][17] Valuation Metrics - DECK is currently trading at a forward 12-month P/S ratio of 3.09, significantly higher than the industry average of 1.45 and the sector average of 1.50, indicating strong investor confidence but also heightening valuation risk [9][10] - Compared to peers, Boot Barn has a forward P/S of 1.56, Skechers at 0.73, and Adidas at 1.35, highlighting DECK's premium positioning [10] Long-term Growth Potential - Deckers is focusing on brand portfolio reinforcement through innovative product launches and optimized distribution strategies, with management guiding for a 15% year-over-year revenue growth to $4.9 billion for fiscal 2025 [18][19] - The company is expanding its international presence, particularly in high-potential markets like China, which is expected to contribute to long-term revenue growth [21] Direct-to-Consumer Segment - The direct-to-consumer (DTC) segment is a key growth driver, with DTC net sales increasing 17.9% to $1.01 billion in the fiscal third quarter, supported by strong digital performance and the expansion of flagship retail locations [22] - Enhanced omnichannel capabilities and loyalty initiatives are fueling customer acquisition and brand loyalty, positioning the company for sustained success [22]

Group 1: Market Overview - The S&P 500 index is down approximately 5% at the start of 2025, indicating investor concerns about the economy [1] - Stocks are experiencing a significant decline, reflecting broader economic worries [1] Group 2: Deckers Outdoor - Deckers Outdoor is the worst-performing stock on the S&P 500, down 46% [3] - The company reported a 17% revenue growth in Q4 2024, with net sales of $1.8 billion, but analysts were not satisfied with its guidance projecting 15% growth for the current year [3][4] - The stock was previously trading at over 35 times its trailing earnings but has since dropped to about 18 times [4] - Economic uncertainties, including trade wars and tariffs, pose risks to Deckers' business, and there is potential for guidance cuts [5] Group 3: Tesla - Tesla is the second worst-performing stock, down 38%, facing challenges due to questionable growth prospects and controversies surrounding CEO Elon Musk [6] - The company's automotive revenue fell by 8% in Q4, totaling $19.8 billion, with profits declining by 71% year over year to $2.3 billion [7] - Tesla's stock is trading at over 90 times its estimated future earnings, indicating it remains highly expensive with potential for further decline [8] Group 4: On Semiconductor - On Semiconductor is the third worst-performing stock, down 36%, primarily affected by economic headwinds in the automotive sector [9] - The company reported sales of $7.1 billion in 2024, a 14% decline year over year, suggesting a challenging recovery ahead [10] - On Semiconductor trades at a relatively modest valuation of 16 times next year's estimated earnings, presenting a potential long-term buying opportunity [10][11] - The long-term growth prospects for semiconductor companies are significant, with On Semiconductor's stock at multiyear lows, indicating potential for future recovery [11]

Company Overview - Deckers Outdoor Corporation, founded in 1973 and headquartered in Goleta, California, is a leading designer, producer, and brand manager of innovative footwear and accessories for outdoor sports and lifestyle activities [12] - The company markets products primarily under four proprietary brands: UGG, HOKA, Teva, and other brands, mainly Koolaburra [12] Investment Ratings - Deckers is currently rated as a 3 (Hold) on the Zacks Rank, with a VGM Score of A, indicating a solid overall performance [12] - The company is considered a top pick for growth investors due to its strong Growth Style Score of A, forecasting a year-over-year earnings growth of 21% for the current fiscal year [13] Earnings Estimates - In the last 60 days, three analysts have revised their earnings estimates higher for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.07 to $5.88 per share [13] - Deckers has an average earnings surprise of 36.8%, showcasing its ability to exceed earnings expectations [13]

Deckers Outdoor Corporation (DECK) is maintaining a strong growth trajectory, backed by the continued success of its UGG and HOKA brands, international expansion efforts and a heightened focus on direct-to- consumer (DTC) sales. The company's strong brand equity and tight inventory controls continue to support solid demand and healthy profit margins. A major contributor to Deckers' performance is the rapid growth of its DTC business. This channel allows the company to maintain tighter control over its brand ...

Group 1 - The author expresses a strong interest in a particular stock, indicating it has been added to their watchlist for potential future investment [1] - The author has extensive experience in investment advising and fund management, having been active in the field since the 1980s [1] - The focus of the author's current efforts is on a new investing group dedicated to navigating the modern investment climate with a unique approach to income investing [1] Group 2 - The author has a beneficial long position in DECK shares, indicating confidence in the stock's performance [2] - The article reflects the author's personal opinions and is not influenced by any business relationships with companies mentioned [2] - There is a disclaimer regarding the nature of the article, emphasizing that past performance does not guarantee future results [3]

Core Insights - The article discusses the use of technical indicators, specifically the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), to evaluate stocks with strong fundamentals [2][3] Group 1: The Trade Desk - The Trade Desk's stock price forecast is $116.41, indicating a potential upside of 97.98% from the current price of $58.80, based on 29 analyst ratings [4] - The Trade Desk's RSI recently rose above 30, currently sitting at around 37, signaling a bullish trend after a significant decline [5] - The MACD histogram for The Trade Desk has also started rising above zero, indicating positive trading momentum [3][5] - The stock is down 56% from its 52-week high, which was reached in early December [5] - The Trade Desk has experienced substantial revenue growth, exceeding 20% annually since 2015, particularly benefiting from the growth in connected TV advertising [7][8] Group 2: Deckers Outdoor - Deckers Outdoor's stock price forecast is $197.41, suggesting a 67.09% upside from the current price of $118.14, based on 19 analyst ratings [9] - The stock's RSI has recently risen above 30, indicating a potential recovery after a significant drop [10] - The MACD histogram for Deckers Outdoor has been rising above zero, suggesting positive momentum [10] - Deckers Outdoor's earnings grew by 47% in 2024, driven by the success of its HOKA brand and a return to growth for its UGG brand [9] - Despite a 45% decline from its 52-week high, analysts maintain a bullish outlook, with an average price target of $230, implying nearly 86% upside [11][12]

Group 1 - The article introduces Penny Wise Research as a new contributing analyst to Seeking Alpha, emphasizing the opportunity for individuals to share investment ideas and get published [1] - The focus is on empowering everyday investors through well-researched articles that challenge conventional financial concepts and provide independent analysis [2] Group 2 - The article does not contain any specific company or industry analysis, nor does it provide financial data or performance metrics [3][4]

Core Insights - The article emphasizes the importance of analyzing a company's financial health beyond just sales and earnings figures for sustainable investment growth [1][2] Financial Analysis - A critical analysis of a company's financial background is essential for informed investment decisions, with coverage ratios being a key focus [2] - The Interest Coverage Ratio is highlighted as a crucial indicator of a company's ability to meet interest obligations from operating earnings [3][4] - A higher Interest Coverage Ratio indicates a stronger financial position, while a ratio below 1.0 suggests potential default risks [7] Company Examples - Brinker International, Inc. (EAT) has a Zacks Rank 1 and a VGM Score of B, with a trailing four-quarter earnings surprise of 24.7% on average [12] - Ralph Lauren Corporation (RL) holds a Zacks Rank 2 and a VGM Score of A, with a trailing four-quarter earnings surprise of 6.5% on average [13] - Sterling Infrastructure, Inc. (STRL) also carries a Zacks Rank 2 and a VGM Score of A, with a trailing four-quarter earnings surprise of 16.2% on average [15] - Deckers Outdoor Corporation (DECK) has a Zacks Rank 2 and a VGM Score of A, with a trailing four-quarter earnings surprise of 36.8% on average [16] Growth Projections - The Zacks Consensus Estimate for Brinker International indicates sales growth of 18.7% and EPS growth of 102.4% from the previous year [13] - Ralph Lauren's sales and EPS are projected to grow by 5.8% and 16.5%, respectively, from the year-ago period [14] - Sterling Infrastructure's EPS is expected to grow by 20.5% from a year ago [15] - Deckers is projected to see sales and EPS growth of 15.6% and 21%, respectively, from the previous year [16]

Industry Overview - The Retail – Apparel and Shoes industry includes companies that design, source, and market clothing, footwear, and accessories for all demographics, benefiting from strong consumer demand for activewear and athleisure [1] - Industry players are focusing on product innovations, active promotions, store expansion, and enhancing e-commerce capabilities to capture market share [4][5] Positive Catalysts - The increasing focus on fashion is driving demand for innovative apparel and footwear in the U.S. [3] - E-commerce is crucial for the growth of the athleisure market, with companies leveraging digital channels to build customer bases [5][6] - Investments in supply chains and order fulfillment are expected to provide competitive advantages [7] Recommended Stocks - Five stocks with strong revenue and earnings growth potential for 2025 are highlighted: Deckers Outdoor Corp. (DECK), Tapestry Inc. (TPR), Urban Outfitters Inc. (URBN), Stitch Fix Inc. (SFIX), and On Holding AG (ONON) [2][8] Company Highlights Deckers Outdoor Corp. (DECK) - DECK has a diverse brand portfolio and strategic growth initiatives, with a focus on innovation and expanding consumer reach [10][11] - Expected revenue and earnings growth rates are 10.1% and 12.2%, respectively, for the next year [12] - The average short-term price target indicates a potential upside of 127.8% from the last closing price of $124.68 [13] Tapestry Inc. (TPR) - TPR has seen robust revenue growth driven by Coach's performance and international expansion [14] - The company expects revenues of $6.85 billion in fiscal 2025, reflecting a 3% year-over-year growth [15] - The average short-term price target suggests a maximum upside of 45.3% from the last closing price of $75.72 [16][17] Urban Outfitters Inc. (URBN) - URBN has experienced strong growth across its segments, with significant contributions from Anthropologie and Free People [18] - The company is pursuing aggressive store expansion and has improved gross margins [19] - Expected revenue and earnings growth rates are 6.6% and 14.5%, respectively, for the current year [20] Stitch Fix Inc. (SFIX) - SFIX's transformation strategy has led to improvements in inventory management and client satisfaction [22] - The company has a debt-free balance sheet, providing financial flexibility for growth [23] - Expected revenue and earnings growth rates are -7.7% and 60.6%, respectively, for the current year [24] On Holding AG (ONON) - ONON develops and distributes sports products, focusing on high-performance footwear and apparel [26] - Expected revenue and earnings growth rates are 27.4% and 5.5%, respectively, for the current year [27] - The average short-term price target indicates a maximum upside of 51.1% from the last closing price of $48.32 [28]