Core Insights - The Nasdaq index has surged nearly 50% since April, indicating potential overvaluation from a technical perspective, with a notable 6% increase since September [1] - Investors are encouraged to take advantage of the current market conditions to purchase high-quality large-cap stocks that are trading below their historical highs [2] Company Overview: Deckers Brands - Deckers Brands (DECK) is recognized for its strong management, solid balance sheet, and promising growth outlook, having outperformed the S&P 500 over the last decade [3][4] - The stock has increased approximately 1,100% over the past ten years, significantly outperforming the S&P 500's 260% and Nike's 25% [4] - The growth of Deckers is largely attributed to its high-end running shoe brand HOKA, which has achieved a compound annual growth rate of around 50% over the last four years [7] Financial Performance - Deckers has experienced an average revenue growth of 19% from FY21 to FY25 and a 32% increase in GAAP earnings per share (EPS) [8] - Following a Q3 FY25 earnings release that provided weaker guidance, DECK stock fell approximately 48% from its all-time highs [11] - The stock is currently trading at a 30% discount to the Retail-Wholesale sector and 22% below the S&P 500, despite outperforming both by about four times over the past decade [16] Technical Analysis - Deckers stock found support at its long-term 200-week moving average, which has historically indicated potential for upward movement [12] - The stock is trading in line with its 10-year median at 18.1X forward 12-month earnings, suggesting it may be undervalued [16] Future Outlook - Revenue for Deckers is projected to grow by 9% in FY26 and 7% in FY27, with adjusted earnings expected to remain flat year-over-year in FY26 before increasing by 8% in FY27 [15] - The company maintains a robust balance sheet with $1.7 billion in cash and equivalents, $3.8 billion in total assets, and no debt, positioning it well to navigate economic uncertainties [17]
Buy this S&P 500 Stock On the Dip for 100% Upside