Has Deckers Outdoor Stock Quietly Become A Value Play?

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].