Deckers Outdoor

Deckers Outdoor

DECK

$ 192.49

$10.58 5.82% 49%

IBD Stock Analysis

• Raced past a 182.26 cup-with-handle buy point
• 57% EPS growth over the past three quarters
• Part of IBD Leaderboard and SwingTrader

Composite Rating

91/99

Industry Group Ranking

181/197

Emerging Pattern

Cup with Handle

Cup with Handle

A positive chart pattern named such because it resembles the outline of a coffee cup with a handle. The pattern can last from seven weeks to as long as a year, but most are three to six months.

* Not real-time data. All data shown was captured at 12:24PM EST on 11/22/2024.

Deckers (DECK) is the IBD Stock Of The Day as it sprints past a buy point to a new buy amid robust earnings and a positive analyst initiation.

Maker Of Hoka Shoes Started At Buy

On Friday, analysts at Needham initiated coverage of Deckers Outdoor stock with a buy rating and 218 price target. That suggests more upside for DECK stock, which already sits on a nearly 72% rally so far in 2024.

In late October, the Hoka shoe maker and Ugg shoe maker cleared an early entry after smashing earnings expectations for its second quarter.

Though Deckers is a shoe manufacturer, its fortunes are tied to retail. Retail earnings and holiday outlook have been generally solid, with Walmart (WMT) a standout this season. On Friday, Gap (GPS) and Ross Stores (ROST) made powerful earnings gap-ups, before trimming gains.

Deckers Stock Gaps Up

Shares of Deckers Outdoor gapped up 5.9% to 192.57 on the stock market today, hitting an all-time high. Deckers stock topped a 182.26 buy point from a cup-with-handle base, according to MarketSurge pattern recognition. The buy zone runs to 191.37.

The relative strength line for DECK stock is rising fast but remains below the peak of the base for now. An RS line moving to new highs along with the Hoka sneaker maker's shares would send a positive sign. A rising RS line means that a stock is outperforming the S&P 500 index. It is the blue line in the chart provided.

The current base shows symmetry and hints of institutional accumulation, according to the IBD markets team. The up/down volume ratio is highly favorable at 1.7.

IBD added DECK stock to Leaderboard as it gapped up above the 10-week line on earnings to seize an early entry. That move came as Deckers delivered stronger-than-expected Q2 earnings and helped to set up Friday's breakout. The Hoka shoe maker is also on SwingTrader.

On Holding (ONON), the Swiss manufacturer of the popular On Cloud shoes, can be found on the IBD 50 list of top growth stocks.

ONON stock popped 3.1% midday Friday to a new high. Shares rebounded from their 50-day line this week and ran back through a buy zone.

Deckers Outdoor Earnings

The IBD Stock Checkup tool shows that DECK stock is currently the No. 2 shoe and apparel manufacturer, behind only ONON stock, in terms of its Composite Rating, which rolls various fundamental and technical metric into one easy-to-use score.

In terms of key IBD ratings, Deckers Outdoor earns a Composite Rating of 91, RS Rating of 86 and EPS Rating of 99, all out of a best-possible 99.

Further, Deckers boasts eight quarters of rising fund ownership. And earnings growth averaged 57% over the past three quarters, above the three-year rate of 33%.

On Oct. 25, Deckers posted a 39% earnings per share jump for the fiscal second quarter, far outpacing views, as revenue rose 20%. Though robust, growth on both the top and bottom lines slowed from the prior quarter.

Hoka shoe sales continued to drive growth, soaring 35%. UGG sales rose 13%.

For the full year ending in March 2025, analysts project Deckers earnings will grow 14% per share. That would compare to a 50.5% jump last fiscal year. Analysts expect Deckers to see earnings weakness in the second half of this year.

Why Analyst Thinks DECK Stock Is A Buy

But on Friday, equity research firm Needham initiated coverage of Deckers stock with a buy rating, saying that second-half guidance "looks extremely conservative."

Deckers is "one of the highest-quality companies in our coverage," the Needham analysts told investors, according to TheFly.com. They cited a strong, multiyear performance record, two of the strongest shoe brands in Hoka and Ugg, a stellar management team, and a fortress balance sheet. Finally, the analysts said they see the potential  for shares of DECK stock to "continue grinding higher."

Meanwhile, investors continue to watch the state of consumer financial health amid inflation. Retailers are bracing for President-elect Donald Trump's tax and tariffs policies, which could boost consumer spending and fuel inflationary pressures.

Please follow Aparna Narayanan on X @IBD_Aparna for more coverage.

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