Core Viewpoint - Deckers (DECK) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of changing earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Recent Performance and Projections - For the fiscal year ending March 2025, Deckers is projected to earn $5.53 per share, reflecting a 13.8% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Deckers has risen by 4.7%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Deckers to a Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for higher stock prices in the near term [10].

Core Viewpoint - Deckers is showing positive stock performance relative to the broader market, with a recent trading price of $207.25, reflecting a 1.32% increase, outperforming the S&P 500 and other indices [1] Financial Performance - The upcoming earnings report for Deckers is anticipated to show an EPS of $2.44, which is a 3.17% decrease from the same quarter last year, while quarterly revenue is expected to reach $1.69 billion, marking an 8.13% increase year-over-year [2] - For the entire fiscal year, earnings are projected at $5.49 per share and revenue at $4.87 billion, indicating increases of 12.96% and 13.64% respectively compared to the previous year [3] Analyst Estimates - Recent changes in analyst estimates for Deckers reflect positive sentiment regarding the company's business operations and profit generation capabilities [4] - The Zacks Rank system, which incorporates these estimate changes, currently ranks Deckers as 2 (Buy), indicating a favorable outlook [6] Valuation Metrics - Deckers is currently trading at a Forward P/E ratio of 37.26, significantly higher than the industry average of 17.03, suggesting a premium valuation [7] - The company's PEG ratio stands at 2.87, compared to the Retail - Apparel and Shoes industry average of 1.52, indicating that Deckers is expected to grow at a slower rate relative to its valuation [8] Industry Context - The Retail - Apparel and Shoes industry is positioned in the top 35% of all industries according to the Zacks Industry Rank, which suggests a favorable environment for companies within this sector [8] - Research indicates that industries rated in the top 50% outperform those in the bottom half by a factor of 2 to 1, highlighting the potential for investment opportunities in well-ranked sectors [9]

Core Insights - Deckers Outdoor Corporation (DECK) is experiencing strong upward momentum, trading above its 50 and 200-day simple moving averages, indicating price stability and long-term bullish trends [1][2]. Stock Performance - DECK closed at $207.11, above its 50-day SMA of $184.79 and 200-day SMA of $161.58, reflecting a continued uptrend and positive market sentiment [2]. - The stock is currently 3.5% below its 52-week high of $214.70, achieved on December 20, 2024, with a 33.1% increase in the past three months compared to the Zacks Retail-Apparel and Shoes industry's 13.2% growth [5][6]. Operational Efficiency and Growth - Deckers has enhanced operational efficiency and growth initiatives, outperforming the broader Retail-Wholesale sector and the S&P 500 index, which grew by 7.2% and 5.2% respectively during the same period [6]. Brand Performance - The company's core brands, UGG and HOKA, are central to its success, with HOKA projected to become a multi-billion-dollar brand. In Q2 of fiscal 2025, HOKA sales increased by 34.7%, while UGG saw a 13% growth [9][10]. - Year-over-year increases in net sales for HOKA and UGG are anticipated at 24% and 5.4% respectively for fiscal 2025 [10]. Direct-to-Consumer (DTC) Business - The DTC business contributed significantly, with net sales rising 19.9% to $397.7 million and comparable net sales increasing by 17%. DTC revenues are expected to grow by 12.6% in fiscal 2025 [11]. Wholesale Channel Success - Wholesale revenues surged 20.2% year over year, reaching $913.7 million, driven by strong performances from HOKA and UGG, with wholesale revenues rising 33% and 14% respectively [12][13]. International Expansion - International sales jumped 33% year over year, supported by strategic investments in new stores and retail locations, with expected revenue growth of 15.5% in fiscal 2025 [14][15]. Financial Outlook - Total revenues for fiscal 2025 are projected at $4.8 billion, a 12% increase from the previous year, with HOKA expected to achieve 24% growth and UGG mid-single-digit growth [16]. - The gross margin outlook has been revised to 55-55.5%, and EPS guidance has been raised to $5.15-$5.25, reflecting improved profitability from $4.86 in the prior year [17]. Analyst Sentiment - Analysts have positively revised the Zacks Consensus Estimate for EPS, with current fiscal year estimates increased by one penny to $5.49 per share, and next fiscal year's estimate raised to $6.22 per share [18][19].

Core Insights - Deckers Outdoor Corp (DECK) has shown strong stock performance with an 87.4% lead for 2024 and is on track for its fourth gain in the last five sessions [4] - The stock recently reached an all-time high of $214.70, supported by the 20-day moving average, indicating potential for further record peaks [4] - The stock's Schaeffer's Volatility Scorecard (SVS) is at 95 out of 100, suggesting it has consistently outperformed volatility expectations over the past year [1] Volatility and Price Movement - The stock's recent high coincides with historically low implied volatility (IV), which has historically generated positive momentum [2] - Data indicates that one month after similar signals, the stock was higher 80% of the time, averaging a 5.7% gain [3] - Currently priced at $208.70, a similar upward movement could push DECK to a new record high of $220.59 [3] Analyst Sentiment - Among analysts covering the stock, nine have rated it as a "hold," while the 12-month consensus target price is $202.15, representing a 3% discount to current levels [3]

Group 1 - The average brokerage recommendation (ABR) for Deckers (DECK) is 2.00, indicating a "Buy" on a scale from 1 (Strong Buy) to 5 (Strong Sell) based on recommendations from 20 brokerage firms [10] - There are nine "Strong Buy" and two "Buy" recommendations, which account for 45% and 10% of all recommendations respectively [2] - Analysts are increasingly optimistic about Deckers' earnings prospects, as indicated by a consensus revision of EPS estimates higher, suggesting potential for stock price increase in the near term [8] Group 2 - The Zacks Consensus Estimate for Deckers has increased by 0.1% over the past month to $5.49, contributing to a Zacks Rank 2 (Buy) for the company [17][18] - The Zacks Rank is a quantitative model that reflects earnings estimate revisions and is considered more timely in predicting future stock prices compared to the ABR [15][16] - The ABR may not always be up-to-date, while the Zacks Rank quickly incorporates changes in earnings estimates, making it a more reliable indicator for investors [16]

Core Viewpoint - Deckers Outdoor Corporation (DECK) has demonstrated strong performance in the footwear market, significantly outperforming industry benchmarks and showing robust growth in both direct-to-consumer and wholesale channels [1][2][19]. Financial Performance - DECK shares are currently trading at $206.63, just 0.9% below its 52-week high of $208.45, with a 75.4% increase in stock value over the past year compared to the Zacks Retail-Apparel and Shoes industry's 36% growth [1][4]. - In the second quarter of fiscal 2025, DECK's net sales rose 19.9% to $397.7 million, with comparable net sales increasing by 17% [9]. - Total revenues for fiscal 2025 are estimated at $4.8 billion, reflecting a 12% increase from the previous year, with HOKA expected to grow by 24% and UGG projected for mid-single-digit growth [14]. Brand Performance - HOKA achieved a remarkable 34.7% sales increase in the second quarter, while UGG grew by 13%, driven by a diversified product portfolio and optimized distribution strategies [8][7]. - The company's flagship brands, UGG and HOKA, are positioned for continued growth, with HOKA on track to become a multi-billion-dollar brand [7]. Market Position and Strategy - Deckers has strengthened its market position through innovation and a focus on direct-to-consumer operations, enhancing its digital capabilities and omnichannel presence [7][9]. - International sales surged 33% year over year in the fiscal second quarter, indicating strong performances from UGG and HOKA in global markets [10][11]. - Wholesale revenues increased by 20.2% year over year to $913.7 million, with HOKA and UGG contributing significantly to this growth [12][13]. Outlook and Analyst Sentiment - Analysts have positively revised their earnings estimates for DECK, with the consensus estimate for the current fiscal year pegged at $5.48 per share and $6.21 for the next fiscal year [16][17]. - The company has raised its gross margin outlook to 55-55.5% and increased its earnings per share guidance to $5.15-$5.25, indicating improved profitability [15].

Core Viewpoint - The article compares Gap (GAP) and Deckers (DECK) to determine which stock is more attractive to value investors, highlighting the importance of valuation metrics alongside earnings outlooks [1][3]. Valuation Metrics - GAP has a forward P/E ratio of 11.95, while DECK has a forward P/E of 37.20, indicating that GAP may be undervalued compared to DECK [5]. - The PEG ratio for GAP is 1.08, suggesting a more favorable valuation relative to its expected earnings growth, whereas DECK has a PEG ratio of 2.86, indicating a higher valuation relative to growth expectations [5]. - GAP's P/B ratio is 2.91, which is significantly lower than DECK's P/B of 13.92, further supporting the notion that GAP is undervalued [6]. Investment Grades - GAP has received a Value grade of A, while DECK has been assigned a Value grade of F, reflecting the disparity in their valuation metrics [6]. - Both companies have a Zacks Rank of 1 (Strong Buy), indicating positive earnings estimate revisions, but GAP is considered the superior value option based on its valuation figures [3][7].

Core Insights - Deckers Outdoor Corporation (DECK) has recently reached a 52-week high, prompting a reassessment of its stock potential at elevated levels [1][2] - The stock has shown impressive year-to-date momentum, driven by strong demand for its brands HOKA and UGG, with shares advancing 84.3% year to date compared to the industry's rise of 35.5% [3][9] - The company is currently trading at a premium valuation, with a forward P/E ratio of 34.22, reflecting strong fundamentals and growth potential [18] Stock Performance - Deckers closed at $204.95, near its 52-week high of $207.29, with a slight pullback attributed to profit-taking [5] - Technical indicators show the stock trading above its 50-day and 200-day moving averages, indicating robust upward momentum and price stability [6] Brand Performance - HOKA has been a significant growth driver, with a 32% revenue increase in the first half of fiscal 2025, surpassing $2 billion in trailing 12-month revenues for the first time [10] - UGG also contributed to growth, with a 13% increase in the first half of fiscal 2025, supported by strategic initiatives to modernize its offerings [11] Revenue and Earnings Growth - Deckers reported a 20.1% year-over-year revenue surge, with a gross margin of 55.9%, up from 53.4% in the previous year, leading to a 39.5% increase in earnings per share to $1.59 [9] - Direct-to-consumer revenues increased by 22%, while wholesale revenues grew by 20%, showcasing strength across key markets [12] Future Outlook - Management projects a 12% increase in fiscal 2025 net sales to $4.8 billion, with HOKA expected to grow by around 24% and UGG by mid-single digits [14][15] - Wall Street analysts have raised earnings estimates, with the Zacks Consensus Estimate for the current fiscal year increasing by 3.8% to $5.48 per share [16] Investment Considerations - Deckers' strong brand portfolio, financial strength, and strategic initiatives make it a compelling investment opportunity [20] - The company's robust growth and international expansion reflect a well-executed strategy that is expected to drive long-term value for investors [20]

Group 1 - Deckers (DECK) is currently outperforming its peers in the Retail-Wholesale group, with a year-to-date return of approximately 75.9%, compared to the sector average of 29% [4] - The Zacks Rank for Deckers is 1 (Strong Buy), indicating strong analyst sentiment and a positive earnings outlook, with the consensus estimate for full-year earnings increasing by 4.1% over the past quarter [3] - Deckers belongs to the Retail - Apparel and Shoes industry, which has an average gain of 34.3% this year, further highlighting its strong performance within this specific sector [5] Group 2 - The Retail-Wholesale group consists of 210 companies and is currently ranked 9 within the Zacks Sector Rank, which includes 16 different groups [2] - Another notable stock in the Retail-Wholesale sector is Sprouts Farmers (SFM), which has achieved a year-to-date return of 221.1% and also holds a Zacks Rank of 1 (Strong Buy) [4][5] - The Food - Natural Foods Products industry, to which Sprouts Farmers belongs, has seen a year-to-date increase of 84.1% [6]

Core Viewpoint - The analysis compares Gap (GAP) and Deckers (DECK) to determine which stock is more attractive to value investors, highlighting that GAP is currently the superior value option based on various valuation metrics [1][7]. Valuation Metrics - Both GAP and DECK hold a Zacks Rank of 1 (Strong Buy), indicating a positive earnings outlook due to favorable analyst estimate revisions [3]. - GAP has a forward P/E ratio of 12.07, while DECK has a significantly higher forward P/E of 35.53 [5]. - The PEG ratio for GAP is 1.09, suggesting it is more reasonably priced relative to its expected earnings growth compared to DECK's PEG ratio of 2.74 [5]. - GAP's P/B ratio is 2.90, indicating a lower market value compared to its book value, while DECK's P/B ratio is much higher at 13.28 [6]. - These valuation metrics contribute to GAP earning a Value grade of A, whereas DECK has a Value grade of F [6].