Friday, TD Cowen sustained its positive stance on Deckers Outdoor (NYSE:DECK), lifting the stock's price target to $1,000 from the previous $898, while keeping an Outperform rating on the shares.
The firm noted that Deckers has a significant amount of short interest, approximately $770 million or 3.5% of the float. This level of short interest is one of the highest in the sector and is seen as surprising by the analysts. Despite the high short interest, TD Cowen believes in the company's potential, especially considering investor concerns regarding the direction of EBIT margin into fiscal year 2025 from peak levels.
The optimism from TD Cowen is partly based on the earnings per share (EPS) potential for Deckers, which is projected to surpass $40 by fiscal year 2027. The firm's survey indicated that Deckers' brands UGG and HOKA are experiencing significant gains, which contrasts with the pronounced share loss at competitor Nike (NYSE:NKE).
InvestingPro Insights
Amidst the positive outlook from TD Cowen, Deckers Outdoor (NYSE:DECK) showcases a robust financial profile according to the latest InvestingPro data. The company's market capitalization stands at $23.43 billion, reflecting its significant presence in the industry. Deckers holds a Price to Earnings (P/E) ratio of 32.75, suggesting that investors are willing to pay a premium for its earnings potential. This is supported by the company's strong revenue growth, which was reported at 15.34% for the last twelve months as of Q3 2024.
Deckers' gross profit margin is an impressive 54.43%, indicating efficient cost management and a strong pricing strategy. Additionally, the company has demonstrated remarkable returns, with a one-year price total return of 112.06%, signaling investor confidence and a bullish market sentiment.
InvestingPro Tips highlight that Deckers is trading at a high earnings multiple, which aligns with the company's high Price / Book ratio of 11.14. Despite some analysts revising their earnings downwards for the upcoming period, the company's solid financial metrics suggest that it may continue to perform well. Investors looking for more in-depth analysis and additional tips can find over 17 InvestingPro Tips for Deckers, including insights on profitability and liquidity, by visiting https://www.investing.com/pro/DECK. For those interested in a subscription, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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