Core Viewpoint - Deckers Outdoor Corporation (NYSE: DECK) is highlighted as a strong investment opportunity due to significant hedge fund interest and a solid return on equity, making it one of the safest stocks to invest in currently [1]. Group 1: Investment Ratings and Price Targets - UBS has maintained a Buy rating for Deckers Outdoor Corporation with a price target of $158, citing the stock's growth potential and current undervaluation [2]. - UBS estimates that Deckers can achieve modest double-digit sales growth, which could elevate its price-to-earnings ratio from 15x to over 20x [3]. Group 2: Financial Performance - Deckers reported Q1 fiscal 2026 sales of $965 million, exceeding Wall Street expectations by over $60 million, along with an earnings per share (EPS) that surpassed expectations by 21% [4]. Group 3: Business Overview - Deckers Outdoor Corporation operates through its subsidiaries, producing and selling clothing, accessories, and footwear for both performance and lifestyle activities globally [5].

Core Viewpoint - Deckers Outdoor (DECK) stock is considered a value stock, currently trading approximately 56% lower than its one-year high and below its three-year average price-to-sales multiple, despite having reasonable fundamentals for its valuation level [2]. Company Overview - Deckers Outdoor specializes in footwear, apparel, and accessories for casual and high-performance use, distributing through department stores and specialty retailers, with 140 global retail locations as of March 2021 [3]. Financial Performance - The company has demonstrated reasonable revenue growth of 16.3% for the last twelve months (LTM) and a three-year average growth of 16.5% [6]. - Deckers Outdoor has a free cash flow margin of nearly 19.2% and an operating margin of 23.6% LTM, indicating strong cash generation capabilities [6]. - The company has avoided major margin shocks in the past twelve months, maintaining stability in its financial performance [6]. - Despite promising fundamentals, DECK stock is trading at a price-to-earnings (PE) multiple of 15.3, suggesting a modest valuation [6]. Competitive Positioning - Compared to the S&P 500, Deckers Outdoor offers a lower valuation, higher revenue growth, and superior margins, positioning it favorably in the market [6]. Investment Strategy - The Trefis High Quality Portfolio, which includes Deckers Outdoor, has a history of outperforming benchmarks like the S&P 500, S&P 1500 Equal Weighted, and others, indicating a strong investment strategy [4][10]. - The portfolio has shown average forward returns of 12.7% over six months and 25.8% over twelve months, with a win rate of over 70% for both durations [7].

Group 1 - The article discusses the worst-performing stocks in the S&P 500 index for September, highlighting significant declines in share prices [1][8]. - CarMax experienced a 24.8% drop in stock value due to disappointing second-quarter results, with revenue and profits down by 25% year over year, reflecting decreased consumer enthusiasm for car purchases [3]. - FactSet Research Systems saw a 22.3% decline, attributed to results that fell below analyst expectations [4]. - Kenvue's stock fell by 21.9%, influenced by negative public perception regarding Tylenol's alleged link to autism following statements from public figures [5]. - Deckers Outdoor's shares decreased by 17.5%, impacted by concerns over tariffs and economic uncertainty, along with disappointing earnings reports [6]. - Synopsys experienced a 16.7% decline due to weakened demand from a major customer and previous export restrictions, which have since been lifted [7]. Group 2 - Despite the declines in these stocks, the S&P 500 index gained 3.5% in September, indicating a broader market resilience [8]. - The article suggests that while some stocks may have fallen due to temporary issues, they could present buying opportunities if the market has overreacted and the company's future remains promising [8][9]. - The Motley Fool Stock Advisor analyst team has identified ten stocks they believe are better investment options than CarMax, indicating a shift in investor focus [10].

Market Overview - Mid cap growth equities experienced modest gains in Q3, with the Russell Midcap Growth Index returning 2.8%, lagging behind the Russell Midcap Value Index at 6.2% and the Russell Midcap Index at 5.3% [3] - The U.S. Federal Reserve's rate cut in September contributed to easing monetary policy, benefiting rate-sensitive sectors and renewing interest in cyclical and innovation-led areas [3] Investor Sentiment - Investor sentiment improved due to the passage of the One Big Beautiful Bill and progress on trade agreements, reducing policy uncertainty and enabling companies to execute delayed strategic decisions [4] - Earnings estimates stabilized, particularly in technology and AI-related sectors, despite ongoing challenges in non-residential construction and discretionary segments [4] Portfolio Performance - The ClearBridge Mid Cap Growth Strategy outperformed its benchmark in Q3, driven by stock selection in IT, consumer staples, and healthcare sectors, while consumer discretionary and financials sectors slightly detracted from performance [5] Sector Contributions - In the IT sector, AppLovin (APP) and Monolithic Power Systems (MPWR) were standout performers, with AppLovin benefiting from strong earnings and optimism around its e-commerce business [6] - Consumer staples saw positive contributions from Performance Food Group (PFGC) and Casey's General Stores (CASY), both benefiting from strong operational performance [7] - The consumer discretionary sector faced challenges, particularly with Chipotle Mexican Grill (CMG) and Wingstop (WING) experiencing declines due to competitive pressures and softer spending trends [8] - Financials sector was a modest drag on performance, with Tradeweb Markets (TW) and Corpay facing challenges from macro volatility and company-specific issues [9] Portfolio Positioning - New positions were initiated in Roblox, benefiting from improved growth dynamics and advertising opportunities, and APi Group, which is well-positioned in safety and industrial services [10][11] - Exited position in Deckers Outdoor (DECK) due to increasing competitive pressures in the sneaker market [12] Outlook - Leadership within mid growth stocks remains selective, with a few companies rewarded for differentiated technology and strong pipelines, while others struggle with demand and competition [13] - Focus remains on identifying businesses with secular growth drivers across technology, healthcare, and industrials sectors [14] - Near-term market uncertainty is expected to persist, but the strategy is positioned to benefit from companies sustaining durable growth in earnings and cash flow [15] Portfolio Highlights - The ClearBridge Mid Cap Growth Strategy had positive contributions across seven of the 11 sectors, with IT and healthcare being the leading contributors [16] - Stock selection in IT, consumer staples, healthcare, and energy sectors contributed positively, while consumer discretionary and financials sectors weighed on performance [17] - Individual stock contributions included AppLovin, United Rentals (URI), and Performance Food, while detractors included Chipotle Mexican Grill and Tradeweb Markets [18]

Core Viewpoint - Deckers Outdoor Corporation (NYSE: DECK) is perceived to be excessively punished by the market due to a lack of guidance amidst macroeconomic uncertainties [1] Group 1 - The management of Deckers is believed to have acted in the best interest of the company despite the current market conditions [1]

Core Viewpoint - Deckers Outdoor Corporation (NYSE: DECK) is perceived to be excessively punished by the market due to the absence of guidance amidst macroeconomic uncertainties [1] Group 1 - The management of Deckers is believed to have acted in the best interest of the company despite the lack of guidance [1]

Core Insights - Deckers, the parent company of Hoka, has been recognized for its exceptional returns on invested capital according to a report by Citi [1] Company Summary - Deckers has demonstrated strong financial performance, particularly in its ability to generate high returns on invested capital, which positions it favorably in the competitive landscape [1] - The company's brand Hoka has gained significant traction in the market, contributing to Deckers' overall success and financial metrics [1] Industry Summary - The footwear industry is witnessing a shift towards brands that can deliver high returns on investment, with Deckers setting a benchmark for others [1] - Companies in the industry are increasingly focusing on optimizing their capital investments to enhance profitability and shareholder value [1]

Core Insights - Investors are encouraged to consider stocks like Deckers Outdoor, O'Reilly Automotive, and Lululemon Athletica due to their high return on invested capital (ROIC) in the competitive retail sector [1][3] Group 1: Return on Invested Capital (ROIC) - ROIC is a critical metric in the retail sector, indicating how much operating profit a company generates from every dollar invested [2] - The median ROIC for retail stocks tracked by Citi Research is 17.6%, with Deckers leading at 53%, followed by O'Reilly Automotive at 45% and Lululemon at 45% [3] Group 2: Stock Performance and Market Trends - Shares of Lululemon and Deckers have underperformed the broader market in 2025, both down approximately 50% year-to-date, while the S&P 500 has increased around 14% [4] - Analysts predict a flat profit year for Deckers ending March 2026, but expect around 10% growth in the following fiscal year, with a 25% upside implied by average sell-side analyst price targets [5] Group 3: Brand Performance - Hoka, a brand under Deckers, is noted as one of the fastest-growing in the athletic space, although there are concerns about potential growth slowdown in fiscal year 2026 [6] - O'Reilly Automotive is experiencing significant success, with shares up over 32% due to delayed new car purchases, benefiting from its efficient supply chain despite its stock being valued at nearly 33 times forward earnings, the highest in a decade [7]

Industry Overview - The Retail - Apparel and Shoes industry shows resilience amid macroeconomic challenges, driven by evolving consumer preferences and strong brand adaptability [1] - Key factors influencing the industry include fashion trends, consumer spending habits, economic dynamics, and seasonal variations [3] - The industry faces opportunities and challenges, requiring continuous product innovation and effective marketing while contending with fierce competition and price sensitivity [3] Key Trends - Consumer spending remains strong, with U.S. retail sales increasing by 0.6% in August, and clothing store sales rising by 1% month-over-month [4] - The Federal Reserve's interest rate cuts have lowered borrowing costs, enhancing consumer flexibility for discretionary spending [4] - Retailers are expected to see increased demand during the holiday season, creating opportunities for stronger sales and revenue growth [4] Company Highlights - Deckers Outdoor Corporation, Boot Barn Holdings, Zumiez Inc., and Genesco Inc. are identified as attractive investment opportunities due to their disciplined execution and digital strength [2] - Genesco is experiencing growth driven by a refreshed product mix and strategic investments, with a projected sales growth of 3.7% and EPS growth of 71.3% [17][18] - Zumiez shows resilience with consistent comparable sales growth and a projected sales growth of 3.4% and EPS growth of 566.7% [21][22] - Boot Barn is expanding its store base and leveraging AI-powered retail innovation, with projected sales growth of 13.3% and EPS growth of 12.2% [25][26] - Deckers is performing well with its brands HOKA and UGG, projecting a sales growth of 9% [29][31] Financial Performance - The Zacks Retail - Apparel and Shoes industry ranks 80, placing it in the top 33% of over 250 Zacks industries, indicating positive near-term prospects [8][9] - The industry has underperformed the broader Zacks Retail-Wholesale sector and the S&P 500 over the past year, declining by 2.9% compared to the S&P 500's growth of 18.9% [11] - The industry is currently trading at a forward P/E of 17.9X, lower than the S&P 500's 23.36X and the sector's 24.82X [14]

Deckers (DECK) has been beaten down lately with too much selling pressure. While the stock has lost 13.7% over the past four weeks, there is light at the end of the tunnel as it is now in oversold territory and Wall Street analysts expect the company to report better earnings than they predicted earlier.We use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is oversold. This is a momentum oscillator that measures the speed and change of price m ...