We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Deckers Trades Above 200 & 50-Day SMA: How to Play the DECK Stock?
Read MoreHide Full Article
Deckers Outdoor Corporation (DECK - Free Report) reached a significant support level and could be a good pick for investors from a technical perspective.
DECK broke through the 200-day and 50-day simple moving averages (SMA), which suggests a long-term bullish trend. SMA is employed to ascertain whether the price of a security is trending upward or downward.
Image Source: Zacks Investment Research
Closing at $154.50 yesterday, the stock exceeded both its 200-day and 50-day SMA of $145.89 and $151.92, respectively, highlighting a sustained upward trend.
DECK has displayed a decent performance so far, with its shares appreciating 38.7% year to date. This performance significantly outpaces the Zacks Retail - Apparel and Shoes industry, which has seen growth of 8.2%. The company’s focus on brand expansion, innovation in product development, international market expansion and strengthening direct-to-consumer (DTC) channels has helped it outperform the S&P 500 Index, which grew 21.3% during the same period.
Image Source: Zacks Investment Research
Given the significant gains in its share price this year, the company recently implemented a 6-for-1 stock split to make its common stock more affordable to a wider range of investors, while boosting the trading liquidity of its shares. This stock split is perceived as a welcome move by investors because of its affordability and availability of more shares for trading.
DECK Stock’s Growth Driven by Customer-Centricity and Innovation
Deckers have made notable progress with successful launches of new styles and collections, keeping a customer-centric approach at the forefront. This strategy has allowed the company to expand into product categories such as casual boots, winter footwear and casual shoes, effectively meeting evolving consumer demands.
The focus on innovation is further demonstrated by the introduction of compelling products, which not only captivate consumers but also reinforce the brand's competitive edge in the market. The success of styles like the Cielo X1 and Skyward X, which surpassed expectations, highlights the company's commitment to performance and technological advancement.
Brand expansion is another area of focus for sustained growth. HOKA's strong performance is fueled by its compelling product assortment. The increasing acceptance of both the UGG and HOKA brands, combined with their diverse product lines and robust international presence, creates significant expansion opportunities. This strategy led to impressive sales growth, with HOKA achieving a 29.7% increase and UGG seeing a 14% rise in the first quarter of fiscal 2025.
Deckers' DTC business and a proactive omnichannel expansion strategy bode well. The company's focus on aligning product creation, marketing and omnichannel distribution with consumer needs has enhanced both short-term performance and its long-term brand vision, resulting in 24% sales growth in the first quarter of fiscal 2025.
Bumps in DECK Stock’s Path
While Deckers continues to perform strongly overall, it faces ongoing challenges with its Teva and Sanuk brands due to a subdued demand environment. This resulted in a 4.3% decline in Teva sales in the first quarter of fiscal 2025, while Sanuk experienced a significant sales drop of 28.4% during the same period. The company finalized an agreement to sell off the Sanuk brand, with the transaction anticipated to be completed by August 2024.
Looking ahead, the company expects potential margin pressures. This anticipated margin compression stems from rising costs, particularly from increased freight expenses and a shift toward a more normalized promotional environment. This move toward more promotions and discounts could further squeeze margins, challenging the company's ability to maintain its profitability at the levels seen in the past year.
Deckers Stock’s Premium Valuation
From a valuation standpoint, Deckers currently trades at a premium relative to its industry peers. The company’s forward 12-month price-to-earnings (P/E) ratio is 28.02, higher than the industry average of 16.47. This elevated valuation suggests that investors might be paying a premium relative to the company's anticipated earnings growth.
Image Source: Zacks Investment Research
Investment Guidance on DECK Stock
Shares of Deckers have shown strength on the bourses, thanks to the company’s strategic endeavors. As a result, the stock is trading relatively at a higher valuation than its industry, making it difficult for new investors to take a plunge. Moreover, anticipated margin compression, stemming from rising costs, may arrest the stock’s momentum in the short run. However, investors with a long-term horizon may stay invested in this Zacks Rank #3 (Hold) company.
Three Stocks to Consider
We have highlighted three better-ranked stocks in the broader sector, namely Abercrombie & Fitch Co. (ANF - Free Report) , Shoe Carnival (SCVL - Free Report) and Burlington Stores (BURL - Free Report) .
The Zacks Consensus Estimate for ANF’s current financial-year sales and earnings indicates growth of 13% and 63.4%, respectively, from the year-ago reported figures. Abercrombie has a trailing four-quarter earnings surprise of 27.9%, on average.
Shoe Carnival, one of the nation's largest family footwear retailers, offers a broad assortment of moderately priced dress, casual and athletic footwear for men, women and children. The stock currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for SCVL's current fiscal sales indicates growth of 5.09% from the year-ago reported figure.
Burlington Stores is a nationally recognized off-price retailer of high-quality, branded apparel, footwear, accessories and merchandise for the home at everyday low prices. It currently sports a Zacks Rank #2. BURL has a trailing four-quarter earnings surprise of 18.4%, on average.
The Zacks Consensus Estimate for Burlington Stores’ current financial-year sales and earnings suggests growth of 10.1% and 30.5%, respectively, from the year-ago reported numbers.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Deckers Trades Above 200 & 50-Day SMA: How to Play the DECK Stock?
Deckers Outdoor Corporation (DECK - Free Report) reached a significant support level and could be a good pick for investors from a technical perspective.
DECK broke through the 200-day and 50-day simple moving averages (SMA), which suggests a long-term bullish trend. SMA is employed to ascertain whether the price of a security is trending upward or downward.
Image Source: Zacks Investment Research
Closing at $154.50 yesterday, the stock exceeded both its 200-day and 50-day SMA of $145.89 and $151.92, respectively, highlighting a sustained upward trend.
DECK has displayed a decent performance so far, with its shares appreciating 38.7% year to date. This performance significantly outpaces the Zacks Retail - Apparel and Shoes industry, which has seen growth of 8.2%. The company’s focus on brand expansion, innovation in product development, international market expansion and strengthening direct-to-consumer (DTC) channels has helped it outperform the S&P 500 Index, which grew 21.3% during the same period.
Image Source: Zacks Investment Research
Given the significant gains in its share price this year, the company recently implemented a 6-for-1 stock split to make its common stock more affordable to a wider range of investors, while boosting the trading liquidity of its shares. This stock split is perceived as a welcome move by investors because of its affordability and availability of more shares for trading.
DECK Stock’s Growth Driven by Customer-Centricity and Innovation
Deckers have made notable progress with successful launches of new styles and collections, keeping a customer-centric approach at the forefront. This strategy has allowed the company to expand into product categories such as casual boots, winter footwear and casual shoes, effectively meeting evolving consumer demands.
The focus on innovation is further demonstrated by the introduction of compelling products, which not only captivate consumers but also reinforce the brand's competitive edge in the market. The success of styles like the Cielo X1 and Skyward X, which surpassed expectations, highlights the company's commitment to performance and technological advancement.
Brand expansion is another area of focus for sustained growth. HOKA's strong performance is fueled by its compelling product assortment. The increasing acceptance of both the UGG and HOKA brands, combined with their diverse product lines and robust international presence, creates significant expansion opportunities. This strategy led to impressive sales growth, with HOKA achieving a 29.7% increase and UGG seeing a 14% rise in the first quarter of fiscal 2025.
Deckers' DTC business and a proactive omnichannel expansion strategy bode well. The company's focus on aligning product creation, marketing and omnichannel distribution with consumer needs has enhanced both short-term performance and its long-term brand vision, resulting in 24% sales growth in the first quarter of fiscal 2025.
Bumps in DECK Stock’s Path
While Deckers continues to perform strongly overall, it faces ongoing challenges with its Teva and Sanuk brands due to a subdued demand environment. This resulted in a 4.3% decline in Teva sales in the first quarter of fiscal 2025, while Sanuk experienced a significant sales drop of 28.4% during the same period. The company finalized an agreement to sell off the Sanuk brand, with the transaction anticipated to be completed by August 2024.
Looking ahead, the company expects potential margin pressures. This anticipated margin compression stems from rising costs, particularly from increased freight expenses and a shift toward a more normalized promotional environment. This move toward more promotions and discounts could further squeeze margins, challenging the company's ability to maintain its profitability at the levels seen in the past year.
Deckers Stock’s Premium Valuation
From a valuation standpoint, Deckers currently trades at a premium relative to its industry peers. The company’s forward 12-month price-to-earnings (P/E) ratio is 28.02, higher than the industry average of 16.47. This elevated valuation suggests that investors might be paying a premium relative to the company's anticipated earnings growth.
Image Source: Zacks Investment Research
Investment Guidance on DECK Stock
Shares of Deckers have shown strength on the bourses, thanks to the company’s strategic endeavors. As a result, the stock is trading relatively at a higher valuation than its industry, making it difficult for new investors to take a plunge. Moreover, anticipated margin compression, stemming from rising costs, may arrest the stock’s momentum in the short run. However, investors with a long-term horizon may stay invested in this Zacks Rank #3 (Hold) company.
Three Stocks to Consider
We have highlighted three better-ranked stocks in the broader sector, namely Abercrombie & Fitch Co. (ANF - Free Report) , Shoe Carnival (SCVL - Free Report) and Burlington Stores (BURL - Free Report) .
Abercrombie, a leading casual apparel retailer, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ANF’s current financial-year sales and earnings indicates growth of 13% and 63.4%, respectively, from the year-ago reported figures. Abercrombie has a trailing four-quarter earnings surprise of 27.9%, on average.
Shoe Carnival, one of the nation's largest family footwear retailers, offers a broad assortment of moderately priced dress, casual and athletic footwear for men, women and children. The stock currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for SCVL's current fiscal sales indicates growth of 5.09% from the year-ago reported figure.
Burlington Stores is a nationally recognized off-price retailer of high-quality, branded apparel, footwear, accessories and merchandise for the home at everyday low prices. It currently sports a Zacks Rank #2. BURL has a trailing four-quarter earnings surprise of 18.4%, on average.
The Zacks Consensus Estimate for Burlington Stores’ current financial-year sales and earnings suggests growth of 10.1% and 30.5%, respectively, from the year-ago reported numbers.