Deckers stock holds Buy rating, $150 target from Citi

Friday’s pre-market trading indicated a nearly 15% drop in Deckers Outdoor (NYSE:DECK) shares, following the company’s fourth-quarter performance, which showed weaker than expected results from its Hoka brand. Despite the downturn, Citi analysts maintained a Buy rating and a $150.00 price target on the stock. According to InvestingPro data, DECK maintains strong financial fundamentals with a perfect Piotroski Score of 9, and analysts’ targets range from $100 to $240, reflecting mixed sentiment about the stock’s potential.

Deckers reported earnings per share (EPS) of $1.00 for the fourth quarter of fiscal year 2025, surpassing consensus estimates of $0.60, primarily due to robust UGG sales and gross margins. However, Hoka’s growth of 10% fell short of the anticipated 13%. The underperformance was linked to a slight decrease in US direct-to-consumer (DTC) sales, which the company attributed to challenges in transitioning key models within their Bondi and Clifton lines. The company maintains impressive financial health metrics, with a current ratio of 3.72 and more cash than debt on its balance sheet, as revealed by InvestingPro analysis.

Management highlighted that while sell-through at wholesale levels was outpacing DTC, they refrained from providing official fiscal year 2026 guidance. Instead, they offered insights suggesting that prior to the impact of tariffs, they had expected Hoka to grow approximately 15% (with UGG aiming for mid-single-digit growth). However, due to macroeconomic and consumer uncertainties, especially concerning price sensitivity in the second half of the year, guidance was only provided for the first quarter.

For the first quarter, Deckers anticipates Hoka to achieve at least low double-digit growth despite the near-term challenges posed by model transitions. Citi analysts pointed out that easier comparisons and new store openings could lead to improved growth for Hoka after the first quarter. They expressed confidence in the sustained underlying demand for the Hoka brand and suggested that the current sell-off in Deckers stock might present a particularly advantageous buying opportunity for investors.

In other recent news, Deckers Outdoor Corporation reported its financial results for the fourth quarter of 2025, showcasing a strong performance with earnings per share of $1, surpassing the forecasted $0.59. The company’s revenue for the quarter stood at $1.02 billion, slightly above expectations of $1.01 billion. For the full fiscal year, Deckers achieved a 16% year-over-year revenue growth, reaching $4.986 billion. Despite these positive results, analysts from KeyBanc and Evercore ISI downgraded Deckers’ stock, citing concerns about the growth prospects of its key brands, UGG and HOKA.

KeyBanc downgraded the stock from Overweight to Sector Weight, highlighting that the HOKA brand’s sales performance fell short of expectations and its growth trajectory is decelerating. Evercore ISI also downgraded the stock from Outperform to In Line, reducing the price target significantly from $235 to $110, due to signs of deceleration in the company’s main brand growth engines. The analysts noted external pressures, such as tariffs and weaker consumer sentiment, as potential impacts on Deckers’ performance.

Despite the downgrades, Deckers is expanding its international presence, particularly with the HOKA brand, which saw a 24% year-over-year increase in global revenue, reaching $2.2 billion. The UGG brand also performed well, with a 13% increase in global revenue to $2.5 billion. The company ended the year with $1.9 billion in cash and repurchased $567 million worth of shares, emphasizing its strong financial position.

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