Checking in on the Potential Upside for Deckers Stock

Is there still upside left for DECK after hitting new high?

Mar 18, 2021 at 10:58 AM
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Deckers Outdoor Corporation (NYSE: DECK) is a California-based company. The corporation designs, markets, and distributes footwear, apparel, and accessories developed for everyday casual lifestyle use, as well as high performance activities. Their portfolio of brands includes UGG, KOOLABURRA, HOKA ONE ONE, Teva, and Sanuk.

DECK has been on a constant upward trajectory, gaining 226% over the past year, with much credit due to the supportive 80-day moving average. On Monday, Deckers stock hit a fresh record high of $345.00, but has since pulled back slightly, this morning trading at $337.03. Shares of Deckers stock are currently up 20% year-to-date, and have increased 330% from the March 20202 bottom of $78.70.

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From a fundamental point of view, Deckers has some very impressive figures, which explains its fairly high valuation. Deckers stock currently trades at a price-earnings ratio of 26.31, with a forward price-earnings ratio of 23.20. Some key features of the company are its extraordinary balance sheet and its fast growth on both its top and bottom lines.

According to its last report, Deckers’ balance sheet holds $265.14 million in total debt, which is less than 25% of the amount it holds in cash. The company’s cash and cash equivalents come in at $1.16 billion, giving it plenty of resources to continue expanding and growing revenues in the upcoming years.

In the past 12 months Deckers’ revenues has increased by more than $200 million, bringing its total revenues up to $2.36 billion. Additionally, the company has managed to grow its annual revenues by at least $100 million since fiscal 2017. Deckers has also seen consistent growth on its bottom line despite various obstacles caused by the pandemic. The company increased its net income by roughly $90 million in the past year, bringing its total up to $365 million. Deckers has added $360 million in net profits over the past four years.

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