Deckers Outdoor Corp
| Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
|---|---|---|---|
| LOCK|?m | LOCK|!>&? | LOCK|#?dhDJj# |
Deckers Earnings: Blowout Results Partially Overshadowed by Mild Guidance Hike; Shares Pricey
Fueled by continuing high full-price sales growth for its key footwear brands, Deckers’ (December) fiscal 2025 third-quarter results surpassed our expectations. However, with shares up nearly 30% over the past three months in anticipation of a big holiday period, investors were seemingly disappointed in the full-year guidance as the stock dropped 16% in Jan. 30 aftermarket trading. We expect to raise our $115 fair value estimate by a mid-single-digit percentage on the report, but shares remain overvalued, in our view. We think Hoka and Ugg, the brands that provide an intangible asset-based narrow moat for Deckers, are performing exceptionally well, but also believe that recent sky-high sales growth rates and margins will moderate over time due to intense competition.
