On Friday, Baird, a financial services firm, increased the price target for Deckers Outdoor Corporation (NYSE: NYSE:) shares to $1,075, up from the previous target of $1,050. The firm has maintained an Outperform rating for the stock.
The revision follows Deckers’ first-quarter earnings per share (EPS) surpassing the consensus by 29%, attributed to a revenue beat of approximately 2%. The increase in revenue was significantly driven by strong direct-to-consumer (DTC) sales from HOKA, one of the company’s footwear brands, and an uptick in full-priced selling.
In light of the recent performance, Deckers has adjusted its mid-point earnings per share guidance for the fiscal year 2025 upwards by about 1.5%. This move is seen as a standard approach by the company, yet it signals a robust momentum that could lead to further positive revisions.
The financial quarter just reported will be the last under the leadership of CEO Dave Powers. According to Baird’s outlook, the company is well-positioned to transition under the incoming CEO, Stefano Caroti.
Baird’s analyst pointed out that Deckers’ double-digit revenue growth, leading margins, return on invested capital (ROIC), and potential for cash return continue to support a premium valuation for the company’s shares.
In other recent news, Deckers Outdoor Corporation has been in the spotlight following a series of developments. The company reported a significant increase in Q1 FY2025 revenues, with a 22% growth to $825 million. This growth was primarily driven by the HOKA brand, which saw a 30% surge in revenue to $545 million, and the UGG brand, which reported a 14% rise to $223 million.
Financial services firm Stifel recently raised its price target on Deckers Outdoor shares to $887.00 from the previous $825.00, maintaining a Hold rating on the stock. The firm highlighted the significant pickup in the company’s direct-to-consumer business for its HOKA brand, with growth reported at 33%.
The company’s reiteration of its revenue guidance has been perceived as conservative by Stifel. Stefano Caroti is set to take over as CEO on August 1, 2024, and will be facing high expectations as reflected by the stock’s 30X price-to-earnings multiple on the upper range of the forecast for fiscal year 2025 earnings per share.
InvestingPro Insights
Deckers Outdoor Corporation (NYSE: DECK) is currently demonstrating a solid financial posture as evidenced by real-time data from InvestingPro. The company boasts a healthy market cap of $21.38 billion and is trading at a P/E ratio of 28.57, which aligns with near-term earnings growth. Additionally, Deckers has shown an impressive revenue growth of 18.21% over the last twelve months as of Q4 2024, with a gross profit margin of 55.63%, underscoring the company’s ability to efficiently manage its production costs and pricing strategies.
InvestingPro Tips reveal that Deckers holds more cash than debt on its balance sheet, which is a reassuring sign of financial stability. Moreover, the company’s stock is currently in oversold territory according to the RSI, suggesting a potential buying opportunity for investors. With 8 analysts having revised their earnings upwards for the upcoming period, there is a positive sentiment surrounding the company’s future performance. Additionally, there are over 15 additional InvestingPro Tips available, which could provide further insights into Deckers’ investment potential. Interested readers can access these tips and use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, enhancing their investment decision-making process.
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