Deckers Outdoor Corporation DECK recently touched a 52-week high, prompting investors to reassess the stock's potential at these elevated levels. While the stock has pulled back slightly, its year-to-date momentum remains impressive, driven by strong demand for its iconic brands like HOKA and UGG. 

The key question for investors now is whether Deckers still presents a compelling investment opportunity or should investors tread cautiously given the stock’s rich valuation due to its stellar run on the bourses. Let’s examine the factors influencing Deckers’ stock performance and decide whether it’s time to buy or hold off.

Deckers has been a standout performer in the retail apparel and shoes industry. Shares of this Goleta, CA-based company have advanced 84.3% year to date compared with the industry’s rise of 35.5%.

DECK Stock’s YTD Performance

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Closing yesterday’s trading session at $204.95, Deckers is currently hovering close to its 52-week high of $207.29 attained last week Wednesday. The pullback from this peak could be attributed to profit-taking. However, if the stock manages to break through its 52-week high again, it could reignite buying interest and fresh capital investment. 

Technical indicators support Deckers’ strong performance. The stock is trading above its 50-day and 200-day moving averages, indicating robust upward momentum and price stability. This technical strength reflects positive market perception and confidence in Deckers’ financial health and prospects.

Deckers Trades Above 50 & 200-Day Moving Averages

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HOKA's Growth & UGG's Product Evolution Boost DECK's Portfolio

Deckers’ strong brand portfolio, innovative product launches and strategic market expansion position it favorably in the market. The company’s focus on enhancing direct-to-consumer channels and growing international presence highlights its ability to navigate a competitive landscape that includes players like Abercrombie & Fitch Co. ANF, American Eagle Outfitters, Inc. AEO and The Gap, Inc. GAP.

DECK’s exceptional performance in the second quarter of fiscal 2025 reinforces its position as a solid investment choice. Revenues surged 20.1% year over year, driven by impressive growth across its key brands, HOKA and UGG. Deckers' healthy gross margin of 55.9%, up from 53.4% in the year-ago period, highlights its operational efficiency and pricing power. This contributed to a 39.5% increase in earnings per share to $1.59. 

HOKA continues to be a significant growth driver for Deckers, delivering an impressive 32% revenue increase in the first half of fiscal 2025 compared to last year. This growth propelled the brand to surpass $2 billion in trailing 12-month revenues for the first time. Innovative product launches like the Skyflow and Mach X 2 have bolstered its appeal across performance and lifestyle segments. Regionally, HOKA demonstrated strong international expansion, with overseas revenue growth outpacing U.S. gains. 

While HOKA may be leading the charge, UGG continues to be a significant pillar in Deckers' portfolio. The brand saw 13% growth in the first half of fiscal 2025, driven by strategic initiatives to modernize and diversify its offerings. Iconic franchises like the Tasman and Ultra Mini maintained robust full-price demand globally. Meanwhile, newer styles such as Golden and Lowmel emerged as top revenue contributors. UGG’s growth in international markets, particularly in Europe and Asia, signals its ability to adapt and thrive, even in varying economic conditions.

Deckers has achieved a healthy balance between direct-to-consumer and wholesale channels. While direct-to-consumer revenues increased 22% in the first half, wholesale revenues grew 20%. HOKA and UGG contributed significantly to this growth, showcasing strength across key markets. Deckers' strategic expansion into underpenetrated international markets, along with its focus on community-building activations, has bolstered brand awareness and consumer loyalty.

A Sneak Peek Into Deckers’ Outlook

Management's focus on product innovation, international expansion and consumer-first initiatives strengthens Deckers' competitive positioning.

Deckers envisions a 12% increase in fiscal 2025 net sales, reaching $4.8 billion, with HOKA anticipated to grow by around 24% and UGG by mid-single digits. This is up from its earlier projection of $4.7 billion in net sales. 

Management now foresees fiscal 2025 earnings in the range of $5.15-$5.25 per share, up from $4.86 reported last year. Deckers had earlier guided earnings between $4.96 and $5.11 per share.

How Do Estimates Stack Up for DECK Stock?

Wall Street analysts have expressed confidence in Deckers by raising their earnings estimates. Over the past 60 days, the Zacks Consensus Estimate for the current fiscal year has jumped 3.8% to $5.48 per share, while the consensus mark for the next fiscal year has risen 6.2% to $6.21 per share, highlighting growing optimism about the company's future performance. The estimates suggest year-over-year increases of 12.8% and 13.4%, respectively.

See the Zacks Earnings Calendar to stay ahead of market-making news.
 

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Deckers Valuation: Is Its Premium Price Tag Justified?

Deckers is currently trading at a premium relative to its industry peers, but this elevated valuation is supported by strong fundamentals. With a forward 12-month price-to-earnings (P/E) ratio of 34.22, above the past year’s median of 29, Deckers remains attractive to investors seeking growth potential. Compared to the industry’s forward P/E of 20.13 and the S&P 500’s ratio of 22.62, Deckers’ higher valuation reflects its position as a standout performer in the market.
 

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Should You Buy DECK Stock Now?

Deckers' robust brand portfolio, financial strength and strategic initiatives make it a compelling investment. The impressive growth of HOKA and UGG, balanced channel performance, and strong international expansion reflect a well-executed strategy that should continue to drive long-term value for investors. While some investors may consider locking in gains after a significant run-up, those with a growth-oriented strategy could find this Zacks Rank #1 (Strong Buy) stock still attractive, especially if it breaks through its 52-week high, signaling bullish momentum. You can see the complete list of today’s Zacks #1 Rank stocks here.

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Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report

American Eagle Outfitters, Inc. (AEO) : Free Stock Analysis Report

Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report

The Gap, Inc. (GAP) : Free Stock Analysis Report

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