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Stock (Symbol) Stock Price

Deckers Outdoor (DECK)

$79

Data is as of Expected to Report Sector

June 10

Jul 27

Retail & Restaurant

Sharek’s Take

David SharekIn old news, Deckers is spending money on changing its business model to get rid of middlemen distributors in Europe and to it themselves. Ovbiously analysts & investors weren’t paying attention to this news months ago because they sent DECK lower after it reported earnings last quarter — and said it had to spend money to make money. This is old news, deal with it.

Now with the slight selloff and market correction, DECK is cheaper. This news was no big deal, I guess there’s a lot of finance guys not doing their homework and just working off headlines.

One-Year Chart
Lots of changes in the one-year chart. Last quarter the stock was breaking out, notw its breaking down. The stock’s gone from $91 to $79 with the market correcting.

The P/E has fell from 20 to 17, making the stock undervalued. Estimated Long Term Growth Rate deopped from 29% to a more realiztic 25%.

Earnings Table
DECK’s profits rose only 7% last quarter on a 31% increase in sales. Sales grew 24% two quarters ago, so that was good.

DECK only beat by 4 cents. Analysts were expecting more because the comapny had beat by 14 cents in each of the past two quarters.

Annual Profit Estimates increased, but they surged in my report last quarter. So the stock is not as hot as it was then.

The change in the business model will shift $50 million in sales from next quarter to two quarters from now. That lowered NxtQtrEst and increased the 2QtrsOutEst. These quarterly estimates look better than they did last quarter.

Fair Value
I’m taking DECK’s Fair Value P/E down from 30 to 25. That still leaves substantial upside. This is a really good stock, and has the ability to make big moves like what its projected on the right.
Ten-Year Chart
Deckers is on a little pullback, it looks really good on the ten-year chart.

Amazing how the profits have compounded at 44% a year during the decade while the stock has compounded 51% a year. 

Power Ranking Bottom Line
Growth Portfolio

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Deckers is currently ranked 8th out of 21 stocks in the Growth Portfolio Power Rankings. The stock isn’t as timely as last quarter, but the dip gives good upside to the shares.

Deckers is ranked 7th of 11 stocks in the Aggressive Growth Portfolio. This stock is still timely and the P/E of 17 compared to the estimated Long Term Growth Rate of 25% gives this stock room to run.

Aggressive Growth Portfolio

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