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Deckers Outdoor Corporation (NYSE:DECK) received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$223 at one point, and dropping to the lows of US$101. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Deckers Outdoor's current trading price of US$111 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Deckers Outdoor’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Is Deckers Outdoor Still Cheap?
According to our valuation model, Deckers Outdoor seems to be fairly priced at around 13% below our intrinsic value, which means if you buy Deckers Outdoor today, you’d be paying a fair price for it. And if you believe that the stock is really worth $127.51, then there isn’t much room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Deckers Outdoor’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Check out our latest analysis for Deckers Outdoor
What does the future of Deckers Outdoor look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by a double-digit 16% over the next couple of years, the outlook is positive for Deckers Outdoor. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? DECK’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?