By Cheng Xin,Contributor,Trefis Team

Copyright forbes

Photo illustration by Cheng Xin/Getty Images
Getty Images

Here is why we believe Deckers Outdoor (DECK) stock is worthy of consideration as a value stock. It is presently trading almost 56% lower than its one-year high and is also trading at a price-to-sales multiple that falls below the average over the past three years. Nonetheless, it possesses reasonable fundamentals for its valuation level.

Reasonable Revenue Growth: 16.3% LTM and 16.5% three-year average.

Cash Generative: Almost 19.2% free cash flow margin and 23.6% operating margin LTM.

No Major Margin Shocks: Deckers Outdoor has successfully avoided any margin collapse in the previous twelve months.

Modest Valuation: In spite of promising fundamentals, DECK stock is trading at a PE multiple of 15.3.

Opportunity vs S&P: Compared to S&P, it offers a lower valuation, higher revenue growth, and superior margins.

For some context, Deckers Outdoor offers footwear, apparel, and accessories for both casual and high-performance use, distributing through department stores and specialty retailers, along with operating 140 global retail locations as of March 2021.

Investing in a single stock can be risky, but there is significant value in a more broadly diversified strategy that we adopt with the Trefis High Quality Portfolio. Let us pose this question: Over the past five years, which index do you believe the Trefis High Quality Portfolio has outperformed – the S&P 500, S&P 1500 Equal Weighted, or both? The results might astonish you. Discover how our advisory framework assists in tipping the scales in your favor.

Comparison of DECK with S&P500 Median

Do these figures reveal the complete picture? Read Buy or Sell DECK Stock to determine if Deckers Outdoor still possesses a competitive edge that remains strong.

MORE FOR YOU

Stocks Like These Can Outperform. Here Is Data

Below are statistics for stocks with the same selection strategy employed between 12/31/2016 and 6/30/2025.

Average 6-month and 12-month forward returns of 12.7% and 25.8% respectively

Win rate (percentage of picks returning positive) of > 70% for both 6-month and 12-month durations

Not overly reliant on market crashes. Even during non-crash periods, this strategy has an average return of nearly 20% over 12 months with a 67% win rate.

But Consider The Risk

However, DECK is not immune to significant declines. It dropped 44% during the Dot-Com crash and experienced a staggering 77% decline during the Global Financial Crisis. Even the 2018 correction saw a reduction of over 26%. The Covid sell-off deducted around 55%, and the inflation shock slashed almost 49%. Strong fundamentals are crucial, but when chaos strikes, DECK is no exception.

Moreover, the risk isn’t restricted to severe market crashes. Stocks can decline even in strong market conditions – consider events such as earnings reports, business updates, and changes in outlook. Read DECK Dip Buyer Analyses to understand how the stock has rebounded from significant dips in the past.

The Trefis High Quality (HQ) Portfolio, comprising a collection of 30 stocks, boasts a history of comfortably outperforming its benchmark that encompasses all three indices – the S&P 500, S&P mid-cap, and Russell 2000. Why is that? Collectively, HQ Portfolio stocks have delivered superior returns with diminished risk compared to the benchmark index; a steadier ride, as evident in HQ Portfolio performance metrics.

Editorial StandardsReprints & Permissions