Last Update 21 Dec 25

Fair value Decreased 0.51%

DECK: Brand Strength And Buybacks Will Support Future Upside Potential

Analysts have trimmed their price target on Deckers Outdoor by about $0.60 per share, reflecting slightly lower fair value and profit margin assumptions, even as they acknowledge resilient Hoka and Ugg growth prospects and an overall still-attractive valuation.

Analyst Commentary

Recent Street research reflects a divided but generally constructive view on Deckers Outdoor, with shifts in ratings and price targets driven by updated assessments of growth durability, margin trajectory, and valuation support.

Bullish Takeaways

Bullish analysts highlight the upgraded rating and unchanged higher price targets as evidence that the stock's re rated multiple still offers attractive upside relative to long term growth prospects.
Management commentary has increased confidence in the multi year growth pathway for Hoka, supported by favorable supply and demand dynamics and brand momentum. This underpins estimates into fiscal 2027 and beyond.
Several updates note improving plan attainment for both Hoka and Ugg, reinforcing the view that execution across key franchises can sustain above market growth even amid macro volatility.
Some bulls argue that valuation screens as "awfully cheap" versus consensus growth expectations and peer multiples, suggesting that modest estimate risk is already reflected in the share price.

Bearish Takeaways

Bearish analysts focus on softer implied second half guidance, particularly for Ugg, where revenue is expected to decline, and for Hoka, where growth is expected to slow to the low teens. This raises questions about the durability of the recent growth surge.
Concerns around lagging direct to consumer performance and heightened competition in running footwear feed into fears that current EBIT margins may be near a peak, limiting further upside from operating leverage.
Several price target cuts reflect a view that consensus estimates remain too high relative to near term trends, making the shares harder to defend despite a seemingly undemanding valuation.
Mixed quarterly execution, including a recent result that fell short of some expectations, has led to reduced conviction labels and a more cautious stance on near term share performance, even where longer term theses remain intact.

What's in the News

Urban Outfitters is integrating UGG into its On Rotation experiential retail concept, creating immersive, Gen Z focused holiday installations featuring core and new UGG styles in select flagship stores across major U.S. cities starting November 4, 2025 (company announcement).
Deckers Outdoor issued guidance for the twelve months ending March 31, 2026, targeting approximately $5.35 billion in net sales and diluted EPS between $6.30 and $6.39 (company guidance).
From July 1, 2025 to October 9, 2025, Deckers repurchased about 2.9 million shares for $317 million, bringing total buybacks under its long running program to roughly 47.9 million shares, or 28.62% of shares outstanding, at a total cost of about $2.67 billion (company buyback update).

Valuation Changes

Fair Value: Trimmed slightly to approximately $111.40 from about $111.97 per share, reflecting modestly lower profit margin assumptions.
Discount Rate: Reduced marginally to roughly 8.62% from 8.63%, indicating a very small change in perceived risk profile.
Revenue Growth: Increased slightly to about 6.96% from 6.72%, signaling a modestly more optimistic view on top line expansion.
Net Profit Margin: Lowered slightly to around 16.63% from 16.79%, suggesting a small reduction in long term profitability expectations.
Future P/E: Edged down minimally to approximately 17.26x from 17.29x, indicating a nearly unchanged valuation multiple on forward earnings.

The UGG and HOKA brands are driving global revenue growth through innovative product launches and international expansion, particularly in the APAC and European markets.
Expanding direct-to-consumer channels and selective retail partnerships are enhancing margins and earnings through reduced reliance on wholesale channels and improved full-price sales strategies.
Anticipated challenges from currency fluctuations, supply chain disruptions, and brand strategy shifts could pressure Deckers Outdoor's revenue, margins, and brand equity.

Catalysts

About Deckers Outdoor

Designs, markets, and distributes footwear, apparel, and accessories for casual lifestyle use and high-performance activities in the United States and internationally.What are the underlying business or industry changes driving this perspective?

The UGG and HOKA brands have shown significant growth, with expectations to continue driving revenue increases through innovative product launches and expanding brand recognition globally. This will likely impact revenue growth positively.
Deckers' focus on international expansion, particularly in APAC regions like China, and Europe is expected to continue driving substantial revenue improvements, as seen with UGG's and HOKA's current performance internationally.
The continued investment in direct-to-consumer (DTC) operations and expansion into new markets with selective retail partnerships is expected to enhance margins by reducing reliance on wholesale channels and increasing full-price sales with higher-margin direct sales strategies.
New product launches, such as HOKA's Bondi 9 and Clifton 10, and refreshed categories are aimed at maintaining brand heat and consumer engagement, which will support increased revenue and help manage inventory levels efficiently, thus improving net margins.
Strategic management of brand equity, focusing on maintaining a pull model of demand which has led to strong full-price selling and reduced closeouts, is anticipated to sustain high gross and operating margins, ultimately bolstering earnings growth.

Deckers Outdoor Earnings and Revenue Growth

Deckers Outdoor Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Deckers Outdoor's revenue will grow by 8.5% annually over the next 3 years.
Analysts assume that profit margins will shrink from 19.3% today to 17.4% in 3 years time.
Analysts expect earnings to reach $1.1 billion (and earnings per share of $8.3) by about September 2028, up from $989.7 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 19.9x on those 2028 earnings, up from 17.3x today. This future PE is greater than the current PE for the US Luxury industry at 19.8x.
Analysts expect the number of shares outstanding to decline by 2.36% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.34%, as per the Simply Wall St company report.

Deckers Outdoor Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The anticipated foreign currency exchange rate fluctuations present a potential risk, potentially affecting revenue recognition and leading to pressure on gross profit margins.
The company's plan to phase out the Koolaburra brand involves winding down operations, which could result in short-term losses and impact revenue, though this is intended to focus on more significant growth areas.
Potential supply chain disruptions and geopolitical tensions could affect inventory and delivery timelines, impacting revenue recognition and increasing operational costs.
There are expectations of a more promotional and closeout environment in the upcoming quarters, which may lead to decreased gross margins due to higher discounting and inventory closeouts.
The strength of the HOKA and UGG brands is partly due to a scarcity model, and any shift away from this could result in reduced gross margins and negative impacts on brand equity and long-term revenue potential.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $129.279 for Deckers Outdoor based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $158.0, and the most bearish reporting a price target of just $97.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $6.5 billion, earnings will come to $1.1 billion, and it would be trading on a PE ratio of 19.9x, assuming you use a discount rate of 8.3%.
Given the current share price of $115.41, the analyst price target of $129.28 is 10.7% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Brands Will Face Mixed Outlook While Expanding Distribution And Launching New Collections