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Should You Think About Buying Deckers Outdoor Corporation (NYSE:DECK) Now?

Simply Wall St
·3 min read

While Deckers Outdoor Corporation (NYSE:DECK) might not be the most widely known stock at the moment, it saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today I will analyse the most recent data on Deckers Outdoor’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Deckers Outdoor

Is Deckers Outdoor still cheap?

Deckers Outdoor appears to be overvalued by 34% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$207 on the market compared to my intrinsic value of $154.30. Not the best news for investors looking to buy! Another thing to keep in mind is that Deckers Outdoor’s share price is quite stable relative to the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What does the future of Deckers Outdoor look like?

earnings-and-revenue-growth
earnings-and-revenue-growth

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. Deckers Outdoor’s earnings over the next few years are expected to increase by 22%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? DECK’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe DECK should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on DECK for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for DECK, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about Deckers Outdoor as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that Deckers Outdoor has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in Deckers Outdoor, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.