Deckers Outdoor Corporation (NYSE:DECK), which is in the luxury business, and is based in United States, saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Deckers Outdoor’s outlook and value based on the most recent financial data to see if the opportunity still exists.
What is Deckers Outdoor worth?
According to my valuation model, Deckers Outdoor seems to be fairly priced at around 1.05% above my intrinsic value, which means if you buy Deckers Outdoor today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $152.26, there’s only an insignificant downside when the price falls to its real value. Furthermore, Deckers Outdoor’s low beta implies that the stock is less volatile than the wider market.
Can we expect growth from Deckers Outdoor?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of Deckers Outdoor, it is expected to deliver a negative earnings growth of -5.8%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? DECK seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on DECK for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on DECK should the price fluctuate below its true value.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Deckers Outdoor. You can find everything you need to know about Deckers Outdoor in the latest infographic research report. If you are no longer interested in Deckers Outdoor, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.