Contrarian Plays in the Post-Earnings Aftermath: Deckers, Ross Stores, and Intuit’s Hidden Value

The market’s immediate reaction to earnings reports can be irrational, creating opportunities for contrarian investors to capitalize on overreactions. Recent post-earnings after-hours performance of Deckers (DECK), Ross Stores (ROST), and Intuit (INTU) illustrates this dynamic perfectly. While Intuit surged on strong guidance, Deckers and Ross were hammered by tariff fears and cautious outlooks—despite underlying strengths. Here’s why the beaten-down stocks may offer compelling value.

Deckers Outdoor: A Brand Powerhouse Oversold on Tariff Fears

Deckers reported stellar Q2 revenue growth of 20.1% to $1.311 billion, driven by its HOKA and UGG brands. Despite beating earnings estimates, shares plummeted 13% after-hours as the company warned of potential FY 2026 headwinds from tariffs and slowing HOKA growth.

But here’s the contrarian case:
- Brand dominance: UGG and HOKA command premium pricing power. HOKA’s 34.7% sales growth (to $570.9 million) shows enduring demand for performance footwear.
- Balance sheet strength: $1.226 billion in cash and a $685 million buyback authorization signal financial flexibility.
- Historical resilience: DECK stock has risen 61% of the time post-earnings, with a median 9% one-day pop. This sell-off feels overdone.

Ross Stores: A Discount Retail Giant Discounted Too Far

Ross Stores reported Q1 sales of $4.98 billion (+2.6% Y/Y) and EPS of $1.47, slightly above estimates. Yet shares fell 9% after-hours as the company withdrew its full-year forecast amid tariff pressures. Over half its inventory comes from China, making it vulnerable to rising import costs.

But consider this:
- Valuation: ROST trades at 12.5x forward earnings, a significant discount to its five-year average of 16x.
- Store leverage: With 1,847 Ross Dress for Less stores and 358 dd’s DISCOUNTS locations, its scale should weather inflationary pressures.
- Historical bounce: ROST shares have risen 73% of the time post-earnings over the past three years, with a median 5.2% gain in 21 days.

The market is pricing in a worst-case scenario, but Ross has consistently adapted to past disruptions. This could be a rare entry point.

Intuit: The Overlooked Risk in the Rally

Intuit’s Q3 results delivered an 8% after-hours surge after it beat estimates and raised guidance. Revenue rose 15% to $7.8 billion, fueled by TurboTax’s dominance in tax services.

However, contrarian caution is warranted here:
- Valuation stretch: INTU trades at 24.5x forward earnings, near its five-year high.
- Dependency on tax season: While its ecosystem (QuickBooks, Credit Karma) is growing, the tax business still accounts for over 50% of revenue.
- Margin pressures: While Intuit avoided tariff hits, rising interest rates could slow small-business spending, a key customer segment.

While Intuit’s fundamentals are strong, the stock’s post-earnings rally may have already priced in much of the good news.

The Contrarian Play: Buy the Dip in DECK and ROST, Proceed with Caution on INTU

• Deckers (DECK): The tariff scare is overdone. Buy dips below $100 with a long-term view of UGG/HOKA’s global potential.
• Ross Stores (ROST): At $135, this is a value stock in a sector (discount retail) that thrives in modest growth environments.
• Intuit (INTU): While the business is solid, the stock’s valuation leaves little margin for error. Wait for a pullback before entering.

Final Call to Action

The market’s post-earnings sell-off has created a rare opportunity to buy two iconic brands—Deckers and Ross—at prices that don’t reflect their long-term potential. Tariffs are a short-term challenge, not a death sentence. Meanwhile, Intuit’s rally may be nearing its peak.

For contrarian investors, now is the time to act:
- Open a position in DECK at sub-$100 levels.
- Scale into ROST as it tests support near $130.
- Avoid chasing INTU until valuations normalize.

The next earnings cycle will test these stocks, but history suggests that DECK and ROST will rebound harder than the crowd expects. Seize the opportunity while fear still dominates.

Data as of May 22, 2025. Always conduct your own research and consult with a financial advisor before making investment decisions.