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On Friday, TD Cowen analyst John Kernan adjusted the price target on Deckers Outdoor (NYSE: NYSE:DECK) stock, lowering it to $157 from the previous $175, while maintaining a Buy rating on the shares. The adjustment follows Deckers’ fourth-quarter fiscal year 2025 performance, which surpassed expectations on both revenue and earnings. The company’s initial guidance for the first quarter was below the consensus sales and earnings per share (EPS) forecasts, contributing to a 15% drop in the stock price after hours. According to InvestingPro data, DECK has achieved a perfect Piotroski Score of 9, indicating exceptional financial strength, though the stock has experienced a significant 21% decline over the past week.
Deckers’ guidance reflects caution due to uncertainty surrounding U.S. trade policy. Despite this, Kernan remains optimistic about the company’s future, citing near-term (NT) factors that could improve as fiscal year 2026 unfolds. These include tariff mitigation initiatives expected after the first quarter and a growing global interest in the HOKA brand, which management is actively promoting. With a strong revenue growth of 16.3% in the last twelve months and an attractive PEG ratio of 0.52, InvestingPro analysis suggests the stock may be undervalued relative to its growth potential. Subscribers can access 12 additional ProTips and comprehensive financial metrics for deeper analysis.
Kernan also notes the conservative nature of Deckers’ management in providing guidance, especially regarding revenue growth for the HOKA and UGG brands in the first quarter. This tendency suggests potential for favorable estimate revisions throughout fiscal year 2026, particularly if new trade deals emerge.
Furthermore, Deckers announced a significant $2.25 billion share repurchase program, which, when added to the existing program, totals $2.5 billion. This amount represents approximately 10% of Deckers’ current market capitalization, indicating the company’s confidence in its stock value and commitment to returning value to shareholders.
In other recent news, Deckers Outdoor Corporation reported its fourth-quarter earnings, exceeding its guidance with constant-currency revenue growth of 8% and earnings per share (EPS) of $1.00, surpassing the expected range of $0.42 to $0.47. Despite these results, the company faced challenges with its Hoka brand, which experienced a slowdown in direct-to-consumer (DTC) sales, leading to mixed analyst reactions. Needham adjusted its price target for Deckers to $120 from $150, maintaining a Buy rating, while UBS raised its target to $169, citing anticipated EPS growth driven by Hoka’s sales acceleration. Stifel maintained a Hold rating with a $127 price target, noting concerns over Hoka’s growth potential due to a deceleration in DTC sales. Piper Sandler reiterated a Neutral rating with a $100 target, highlighting a shift towards wholesale and international channels as Deckers enters new partnerships. Citi maintained a Buy rating with a $150 target, expressing confidence in Hoka’s underlying demand despite the recent stock sell-off. Deckers has also projected an 8-10% revenue increase for the first quarter, though this falls short of Wall Street’s expectations. The company has not provided full fiscal year 2026 guidance, attributing caution to macroeconomic uncertainties and price sensitivity.
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