Deckers Outdoor stock: here's why Stephanie Link loaded up on the stock

Stephanie Link of Hightower and UBS analysts are bullish on Deckers Outdoor (DECK), citing its strong brand momentum, particularly with Hoka's global and direct-to-consumer expansion, and an attractive valuation at 17x forward earnings. Despite recent gains, they view DECK as undervalued, with UBS setting a $158 price target implying over 30% upside, driven by projected EPS growth to $10 by FY28 and significant international opportunities, especially in Asia, positioning it as a compelling catch-up trade.

Analysis

Deckers Outdoor Corp (DECK) is being positioned by prominent analysts as an undervalued growth stock, despite a recent 25% rally. Stephanie Link of Hightower highlights the stock as a "compelling catch-up trade," noting its valuation at 17 times forward earnings and its 45% decline from the year-to-date high. The bullish thesis is anchored in strong brand momentum, particularly from Hoka, which is experiencing double-digit growth and significant international acceleration. The company's international sales surged 50% in the last reported quarter, with analysts seeing further potential in markets like China, which currently constitutes 8% of revenue. This view is reinforced by UBS, which reiterated a "buy" rating and a $158 price target, implying over 30% upside. UBS projects that Hoka's expansion into new verticals and geographies could drive EPS from its current $7.90 to $10 by FY28. The company's strategic commitment is further evidenced by increased marketing spend, now exceeding 10% of sales, aimed at sustaining brand momentum. While the general Wall Street consensus is a more modest "overweight" rating with a $130 mean target, the strong conviction from specific analysts points to a significant perceived disconnect between market price and fundamental growth prospects.

Key Decisions for Investors

• Given the strong analyst conviction, a valuation of 17x forward earnings, and robust brand momentum, investors could consider the stock's 45% pullback from its year-to-date high a compelling entry point for a growth-oriented position.
• It is crucial to monitor key performance indicators including Hoka's category growth, direct-to-consumer (DTC) channel performance, and the pace of international sales, as these are the primary catalysts underpinning the bullish thesis and earnings forecasts.
• While UBS presents a high-conviction case with a $158 price target, investors should weigh this against the broader Wall Street consensus of $130, recognizing that achieving the higher valuation depends on the company significantly outperforming market expectations for global growth.