As you might know, Deckers Outdoor Corporation (NYSE:DECK) just kicked off its latest quarterly results with some very strong numbers. The company beat expectations with revenues of US$939m arriving 4.3% ahead of forecasts. Statutory earnings per share (EPS) were US$7.14, 8.8% ahead of estimates. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from Deckers Outdoor's ten analysts is for revenues of US$2.31b in 2021, which would reflect a reasonable 7.3% increase on its sales over the past 12 months. Statutory earnings per share are expected to accumulate 5.9% to US$10.49. Yet prior to the latest earnings, analysts had been forecasting revenues of US$2.28b and earnings per share (EPS) of US$10.22 in 2021. Analysts seem to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target rose 10% to US$209, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Deckers Outdoor analyst has a price target of US$240 per share, while the most pessimistic values it at US$170. This shows there is still quite a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. It's clear from the latest estimates that Deckers Outdoor's rate of growth is expected to accelerate meaningfully, with forecast 7.3% revenue growth noticeably faster than its historical growth of 3.2%p.a. over the past five years. Compare this with other companies in the same market, which are forecast to grow their revenue 7.1% next year. Deckers Outdoor is expected to grow at about the same rate as its market, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around Deckers Outdoor's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. There was also a nice increase in the price target, with analysts feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Deckers Outdoor. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Deckers Outdoor going out to 2022, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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