Is Deckers Outdoor a Bargain After 59% Price Drop in 2025?

• Wondering if Deckers Outdoor is a hidden gem or priced for perfection? Let’s dig into what’s really driving its value right now.
• The stock rose 1.3% over the last week, but that barely offsets a 16.1% slide this past month and a sharp 59.0% drop year-to-date. Even so, the 5-year chart shows a solid 93.7% gain.
• Recent headlines have focused on shifts in the consumer discretionary sector and how evolving consumer preferences are impacting footwear brands. Deckers Outdoor is mentioned among leaders adapting product strategies and streamlining operations. Several analysts have noted increased volatility in the wider sector, which may help explain recent price moves for the stock.
• For the numbers-focused, Deckers Outdoor earned a valuation score of 5 out of 6, suggesting it passes most of the value checks we look for in a stock. In a moment, we’ll break down the different valuation approaches you can use; stick around, because there is an even smarter way to size up its value coming up at the end.

Find out why Deckers Outdoor's -52.5% return over the last year is lagging behind its peers.

Approach 1: Deckers Outdoor Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company’s intrinsic value by projecting its future cash flows and discounting them back to today’s dollars. This method evaluates how much those future cash flows are worth right now, helping investors decide if a stock is currently overvalued or undervalued.

For Deckers Outdoor, the most recent Free Cash Flow reported was $961 million. Analysts provide cash flow estimates for up to five years, with Deckers Outdoor’s Free Cash Flow projected to reach $1.04 billion in 2030. Beyond that, extrapolated estimates from Simply Wall St suggest a continued moderate growth trend in annual cash flows.

Based on the DCF approach, Deckers Outdoor’s intrinsic value comes out to $105.70 per share. This is about 20.7% higher than the stock’s current trading price, indicating a meaningful undervaluation according to this model’s cash flow projections.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Deckers Outdoor is undervalued by 20.7%. Track this in your watchlist or portfolio, or discover 908 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Deckers Outdoor.

Approach 2: Deckers Outdoor Price vs Earnings (PE) Ratio

The Price-to-Earnings (PE) ratio is a popular valuation metric for profitable companies like Deckers Outdoor because it relates the share price to the company’s earnings, helping investors gauge how much they're paying for each dollar of profit. For established businesses, PE serves as a quick pulse-check on valuation, taking both current profitability and investor sentiment into account.

Growth expectations and company-specific risks are crucial in interpreting whether a PE ratio is "normal" or high. Rapidly growing businesses or those with resilient competitive advantages can support higher PE ratios, while riskier or slower-growing firms tend to trade at lower multiples.

Deckers Outdoor currently trades at a PE ratio of 12.0x. For context, the average PE ratio among its peers is 35.1x, while the broader luxury industry average is about 19.2x. At first glance, this makes Deckers Outdoor look attractively valued compared to its sector and competitors.

Simply Wall St’s “Fair Ratio” takes this a step further by incorporating Deckers Outdoor’s earnings growth prospects, risk profile, profit margins, industry positioning and market capitalization. Unlike standard industry comparisons, the Fair Ratio gives a tailored benchmark, providing a more realistic and nuanced view specific to the company's fundamentals. For Deckers Outdoor, the Fair Ratio is 15.3x.

With Deckers Outdoor’s actual PE of 12.0x being somewhat below its Fair Ratio of 15.3x, the stock may be undervalued on an earnings basis, especially when considering its growth and risk factors rather than just peer comparisons.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1421 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Deckers Outdoor Narrative

Earlier we mentioned there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is a simple, story-driven forecast that allows you to set your own expectations for a company’s future, such as revenue, earnings, and margins. This creates a fair value based on your perspective rather than just raw numbers.

Narratives connect the company’s evolving story to objective financial forecasts, making it easy to see how your view translates into an actual value. On Simply Wall St’s Community page, you can create or explore Narratives used by millions of investors to help decide when a stock like Deckers Outdoor looks undervalued or overvalued. These Narratives update dynamically as news and earnings become available.

For example, the current most optimistic Narrative for Deckers Outdoor forecasts the share price reaching $158.00, while the most cautious outlook lands at $97.00. This reflects how investors with different assumptions can view the same company in very different ways. Narratives help you compare your own fair value to the live market price, so your decisions are always based on your own informed view and not just the consensus.

Do you think there's more to the story for Deckers Outdoor? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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