That is the equation of the market; how much money is X company going to earn in Y time.
So all these algorithms are set up with these analyst estimates to trade each perceptable idea of how much the company is worth based on how much it is going to earn in Y time(that day/year).
When information comes out that changes, the algo's are changed by their nalysts to reflect the higher worth of the company based on its ability to earn more money in Y time.
Currently Deckers for this year will earn about 100M in cash in my opinion. Over the coming years with growth of 140% more stores and new product and UGG PUREs effect is realized over time, the analysts are going to change those algo's that control the price action daily for a higher value as earnings and cash production will go up.
it is why Deckers fell in the first place. It wasn;t going to make much money due to lack of growth 2 years ago and the higher sheepskin costs, so earnings got hit. But the ship has been turned around and is now on the correct path again. I believe we are 4-5 years early in the stort. The very beginning was clearly last october. But this train is just beginning to leave the station. Over the next 2 years, I can;t see getting much higher than 100, but over the next 5 years I can;t see how this company is below 200.
See, this is the whole point of the stuid game, figure out why whatever "efficient price" the market(analysts and major holders and algo's) is wrong and how the company is worth more over time.
Deckers over the next 16 months should earn about 220M. That is 10% of itself RIGHT NOW. 79M of that should be used to buy itself back over that time. Then 3-4 years out, double profit margins, more stores, new product international growth...it says it all.
Market has this one wrong for this years earnings, and for long term. Deserves a higher premeium.