Deckers Outdoor (NYSE:DECK) Shares Gap Up Following Strong Earnings

Key Points

• Deckers Outdoor shares experienced a significant opening gap, rising from a previous close of $104.94 to $123.44 after the company reported quarterly earnings that exceeded expectations.
• The firm posted an EPS of $0.93, surpassing the projected $0.68, and had a revenue of $964.54 million, up 16.9% from the prior year.
• In addition, Deckers Outdoor has initiated a $2.25 billion stock buyback program, indicating management's belief that the stock is undervalued.
• Despite the positive earnings report, analysts have mixed ratings, with a range of price targets reflecting uncertainty about future performance.

Deckers Outdoor Corporation (NYSE:DECK - Get Free Report) gapped up prior to trading on Friday after the company announced better than expected quarterly earnings. The stock had previously closed at $104.94, but opened at $123.44. Deckers Outdoor shares last traded at $118.41, with a volume of 4,642,435 shares trading hands.

The textile maker reported $0.93 EPS for the quarter, beating the consensus estimate of $0.68 by $0.25. Deckers Outdoor had a net margin of 19.49% and a return on equity of 41.17%. The firm had revenue of $964.54 million during the quarter, compared to analyst estimates of $901.45 million. During the same quarter in the prior year, the firm earned $4.52 EPS. The business's revenue for the quarter was up 16.9% compared to the same quarter last year.

Deckers Outdoor announced that its board has initiated a stock buyback program on Thursday, May 22nd that permits the company to repurchase $2.25 billion in shares. This repurchase authorization permits the textile maker to purchase up to 11.7% of its shares through open market purchases. Shares repurchase programs are generally a sign that the company's management believes its stock is undervalued.

Wall Street Analysts Forecast Growth

Several equities research analysts recently issued reports on the stock. The Goldman Sachs Group reduced their target price on shares of Deckers Outdoor from $90.00 to $87.00 and set a "sell" rating for the company in a report on Tuesday. KGI Securities raised shares of Deckers Outdoor to a "hold" rating in a report on Monday, May 26th. Argus assumed coverage on shares of Deckers Outdoor in a report on Friday, June 13th. They issued a "hold" rating for the company. UBS Group reduced their target price on shares of Deckers Outdoor from $169.00 to $144.00 and set a "buy" rating for the company in a report on Thursday, July 17th. Finally, Needham & Company LLC reissued a "buy" rating and issued a $128.00 target price (up from $120.00) on shares of Deckers Outdoor in a report on Wednesday. One analyst has rated the stock with a sell rating, fourteen have issued a hold rating, ten have assigned a buy rating and one has issued a strong buy rating to the stock. Based on data from MarketBeat, Deckers Outdoor presently has an average rating of "Hold" and an average target price of $133.66.

Insider Activity

In other Deckers Outdoor news, Director Cindy L. Davis bought 1,825 shares of the business's stock in a transaction that occurred on Friday, June 6th. The stock was purchased at an average cost of $109.76 per share, with a total value of $200,312.00. Following the completion of the acquisition, the director owned 13,340 shares in the company, valued at $1,464,198.40. This trade represents a 15.85% increase in their position. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. Also, insider Angela Ogbechie sold 6,244 shares of the firm's stock in a transaction on Monday, June 2nd. The shares were sold at an average price of $103.89, for a total transaction of $648,689.16. Following the completion of the transaction, the insider directly owned 19,980 shares of the company's stock, valued at approximately $2,075,722.20. This trade represents a 23.81% decrease in their ownership of the stock. The disclosure for this sale can be found here. Corporate insiders own 0.40% of the company's stock.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently modified their holdings of DECK. Revolve Wealth Partners LLC purchased a new position in shares of Deckers Outdoor in the fourth quarter valued at $247,000. Commonwealth Equity Services LLC grew its holdings in shares of Deckers Outdoor by 17.3% in the fourth quarter. Commonwealth Equity Services LLC now owns 9,120 shares of the textile maker's stock valued at $1,852,000 after purchasing an additional 1,346 shares in the last quarter. LPL Financial LLC boosted its stake in Deckers Outdoor by 30.3% during the fourth quarter. LPL Financial LLC now owns 196,013 shares of the textile maker's stock worth $39,808,000 after buying an additional 45,552 shares during the period. Corebridge Financial Inc. boosted its stake in Deckers Outdoor by 12.4% during the fourth quarter. Corebridge Financial Inc. now owns 45,651 shares of the textile maker's stock worth $9,271,000 after buying an additional 5,028 shares during the period. Finally, Modern Wealth Management LLC purchased a new position in Deckers Outdoor during the fourth quarter worth $516,000. 97.79% of the stock is owned by hedge funds and other institutional investors.

Deckers Outdoor Stock Up 12.7%

The firm's 50 day simple moving average is $106.44 and its 200 day simple moving average is $130.35. The company has a market capitalization of $17.67 billion, a PE ratio of 18.59, a price-to-earnings-growth ratio of 7.09 and a beta of 0.99.

About Deckers Outdoor

Deckers Outdoor Corporation, together with its subsidiaries, designs, markets, and distributes footwear, apparel, and accessories for casual lifestyle use and high-performance activities in the United States and internationally. The company offers premium footwear, apparel, and accessories under the UGG brand name; footwear, apparel, and accessories for ultra-runners and athletes under the HOKA brand name; and sandals, shoes, and boots under the Teva brand name.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest and most accurate reporting. This story was reviewed by MarketBeat's editorial team prior to publication. Please send any questions or comments about this story to contact@marketbeat.com.