Deckers Outdoor Corp (DECK): A Winning Formula for Growth and Stability

Deckers Outdoor Corp has a GF Score of 92 out of 100, indicating high outperformance potential. The company designs and sells casual and performance footwear, apparel, and accessories through wholesale partnerships and e-commerce. Deckers has a strong balance sheet with a high interest coverage ratio of 335.26 and a favorable Debt-to-Revenue ratio of 0.06. The Altman Z-Score of 13.07 also indicates robust financial stability.

Deckers Outdoor Corp (DECK), a leading designer and retailer of casual and performance footwear, apparel, and accessories, has garnered significant attention from analysts recently. With a GF Score of 92 out of 100, indicating high outperformance potential, the company's financial performance and strategic positioning have been under scrutiny.

Analyst Sentiment and Price Targets

Over the past three months, 23 analysts have provided ratings for DECK, revealing a mix of bullish and bearish sentiments [1]. The latest ratings indicate a diverse range of opinions, with 8 analysts maintaining a bullish stance, 5 somewhat bullish, 9 indifferent, 0 somewhat bearish, and 1 bearish. The average price target stands at $137.39, with a high estimate of $240.00 and a low estimate of $90.00. This suggests a wide range of expectations for the company's future performance.

Notably, several key analysts have adjusted their ratings and price targets recently. For instance, UBS lowered its rating from 'Buy' to 'Low Buy' and reduced its price target from $169.00 to $144.00. Goldman Sachs initiated coverage with a 'Sell' rating at $90.00, while Telsey Advisory Group maintained a 'Strong Buy' rating at $240.00 [1]. These adjustments highlight the analyst community's diverging views on DECK's valuation and growth prospects.

Financial Performance and Strategic Positioning

DECK's recent financial performance has been impressive, with a solid revenue growth rate of approximately 6.46% in the first quarter of 2025 [1]. The company's gross margin expanded to 55.9%, reflecting effective pricing strategies and cost management. International sales surged 33% year-over-year, driven by robust demand in key markets. However, the company's debt-to-equity ratio of 11.0x indicates a high debt level, which could pose risks in an economic downturn [2].

Valuation and Growth Potential

DECK trades at a P/E ratio of 15.1x and a PEG ratio of 15.0x, which appears expensive at first glance. However, these metrics must be contextualized against the company's 39% EPS growth and 19.4% profit margin—figures that outpace most peers in the retail/wholesale sector. The stock's 34% upside potential, based on the average price target, suggests analysts still see room for re-rating, particularly if the company continues to execute on its international expansion and product innovation.

Conclusion

Deckers Outdoor Corp's high GF Score and strong financial performance have drawn significant attention from analysts. While there is a wide range of opinions on the company's valuation and growth prospects, the recent financial results and strategic positioning indicate a robust foundation for future growth. Investors should closely monitor the evolving analyst sentiment and the company's ability to maintain its growth trajectory in the face of potential economic challenges.

References

[1] https://www.nasdaq.com/articles/analyst-verdict-deckers-outdoor-eyes-23-experts
[2] https://www.ainvest.com/news/deckers-outdoor-deck-navigating-earnings-momentum-analyst-divergence-high-growth-landscape-2507/