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Deckers Outdoor Corp. Message Board

  • tradechief tradechief Apr 11, 2013 1:58 PM Flag

    Standpoint Downgrades Deckers - Expensive and Weak Cash Producer

    Take Deckers for instance. Priced at 17 times earnings, the stock already looks expensive relative to consensus forecasts for 9% long-term earnings growth. In fact, though, Deckers' cash flow statement shows that the company's only generating about $0.79 in real cash profits (FCF) for every dollar it claims to be earning under GAAP. This means that a stock that that already looks pretty expensive under its GAAP valuation is actually about 25% more expensive than that, when valued on free cash flow. To me, it's reason to go a step beyond a hold rating, and downgrade Deckers all the way to sell.

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