For today’s bulletin, we take a look at Deckers Outdoor $DECK. We also provide a link to download a FREE STOCK REPORT on the company.
VALUATION WATCH: Overvalued stocks now make up 49.83% of our stocks assigned a valuation and 20.32% of those equities are calculated to be overvalued by 20% or more. Twelve sectors are calculated to be overvalued.
For today’s edition of our upgrade list, we used our website’s advanced screening functions to search for UPGRADES to BUY or STRONG BUY with complete forecast and valuation data. They are presented by one-month forecast return. Deckers Outdoor is rated STRONG BUY. The rest of our upgrades for today are rated BUY.
| Ticker | Company Name | Market Price | Valuation | Last 12-M Return | 1-M Forecast Return | 1-Yr Forecast Return | P/E Ratio | Sector Name |
| DECK | DECKERS OUTDOOR | 107.45 | 36.86% | 58.22% | 1.10% | 13.24% | 18.88 | Consumer Discretionary |
| DHX | DHI GROUP INC | 2.25 | 19.12% | N/A | 0.70% | 8.36% | 13.78 | Computer and Technology |
| MOMO | MOMO INC -ADR | 44.86 | 20.81% | 20.62% | 0.69% | 8.29% | 27.08 | Computer and Technology |
| CHCT | COMM HLTHCR TR | 27.96 | 18.25% | 14.12% | 0.61% | 7.34% | 19.19 | Finance |
| BOCH | BANK OF COMMRC | 11.8 | 21.04% | 8.76% | 0.55% | 6.54% | 17.02 | Finance |
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Deckers Outdoor Corporation (DECK) is a global leader in designing, marketing and distributing innovative footwear, apparel and accessories developed for both everyday casual lifestyle use and high performance activities. The Company’s portfolio of brands includes UGG, Koolaburra, HOKA ONE ONE, Teva and Sanuk. Deckers Brands products are sold in more than 50 countries and territories through select department and specialty stores, Company-owned and operated retail stores, and select online stores, including Company-owned websites. Deckers Brands has an history of building niche footwear brands into lifestyle market leaders attracting millions of loyal consumers globally.
Decker, the maker of the popular UGG brand boots and Teva outdoor sandals, has had a nice run in 2018. They reported Q4 results last week and the street was pleased.
CEO Dave Powers noted the following at the presentation of the latest results
We closed fiscal 2018 on a high note as we exceeded expectations for the fifth consecutive quarter. The entire Deckers team stepped up to the plate and performed exceptionally well despite the numerous challenges the organization faced over the last twelve months. For the full year, we achieved record revenue of $1.9 billion, drove a 320 basis point improvement in non-GAAP operating margin to 12.4% and increased non-GAAP diluted earnings per share by 50% to a record $5.74. I am confident that the Company is well positioned to build on its recent financial accomplishments and enhance its industry competitiveness through the continued execution of our operating profit improvement plan and strategic focus.
For Q4, the company posted great numbers. Net sales increased 8.4% to $400.7 million compared to $369.5 million for the same period last year. On a constant currency basis, net sales increased 6.6%. Gross margin was 48.0% compared to 43.0% for the same period last year. SG&A expenses were $174.1 million compared to $189.8 million for the same period last year. Non-GAAP SG&A expenses were $172.5 million this year compared to $153.9 million last year. Operating income was $18.3 million compared to an operating loss of $30.9 million for the same period last year. Non-GAAP operating income was $19.9 million this year compared to $5.1 million last year. Diluted earnings per share was $0.66 compared to a loss of $0.49 for the same period last year. Non-GAAP diluted earnings per share was $0.50 this year compared to $0.11 last year.
Sales were strong for key brands like UGGs and Teva. This can be tricky as fashion can be so fickle. But UGG net sales for the fourth quarter increased 6.0% to $257.5 million compared to $243.0 million for the same period last year. For fiscal 2018, sales increased 3.9% to $1.5 billion. Teva sales for the fourth quarter increased 7.3% to $55.0 million compared to $51.3 million for the same period last year. For fiscal 2018, sales increased 13.5% to $133.6 million.
Wall Street was impressed by these figures, as analysts expected far less for Q4. The $0.50/share was a nice beat over the consensus estimate of $0.18/share. Our models have noticed as well and we upgraded the stock in the wake of these latest positive earnings results.
ValuEngine updated its recommendation from BUY to STRONG BUY for DECKERS OUTDOOR on 2018-05-29. Based on the information we have gathered and our resulting research, we feel that DECKERS OUTDOOR has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE Momentum and Company Size.
You can download a free copy of detailed report on Deckers Outdoor Corporation (DECK) from the link below.
| ValuEngine Forecast | ||
| Target Price* |
Expected Return |
|
|---|---|---|
| 1-Month | 108.63 | 1.10% |
| 3-Month | 110.09 | 2.45% |
| 6-Month | 113.86 | 5.96% |
| 1-Year | 121.68 | 13.24% |
| 2-Year | 135.97 | 26.54% |
| 3-Year | 142.27 | 32.41% |
| Valuation & Rankings | |||
| Valuation | 36.86% overvalued | Valuation Rank(?) | 11 |
| 1-M Forecast Return | 1.10% | 1-M Forecast Return Rank | 99 |
| 12-M Return | 58.22% | Momentum Rank(?) | 92 |
| Sharpe Ratio | 0.34 | Sharpe Ratio Rank(?) | 70 |
| 5-Y Avg Annual Return | 10.52% | 5-Y Avg Annual Rtn Rank | 75 |
| Volatility | 31.39% | Volatility Rank(?) | 50 |
| Expected EPS Growth | 1.00% | EPS Growth Rank(?) | 21 |
| Market Cap (billions) | 3.72 | Size Rank | 78 |
| Trailing P/E Ratio | 18.88 | Trailing P/E Rank(?) | 64 |
| Forward P/E Ratio | 18.70 | Forward P/E Ratio Rank | 36 |
| PEG Ratio | 18.96 | PEG Ratio Rank | 2 |
| Price/Sales | 1.96 | Price/Sales Rank(?) | 50 |
| Market/Book | 3.96 | Market/Book Rank(?) | 34 |
| Beta | 1.04 | Beta Rank | 34 |
| Alpha | 0.34 | Alpha Rank | 90 |
DOWNLOAD A FREE SAMPLE OF OUR DECKER OUTDOOR (DECK) REPORT BY CLICKING HERE
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Steve Hach
Senior Editor
ValuEngine.Com