DECKERS OUTDOOR CORP (NYSE:DECK) - A Strong Candidate for GARP Investors
By Mill Chart
Last update: May 21, 2025
DECKERS OUTDOOR CORP (NYSE:DECK) stands out as a compelling pick for investors seeking growth at a reasonable price (GARP). The company, known for its footwear and apparel brands like UGG and HOKA, meets key criteria from Peter Lynch’s investment strategy, balancing solid growth with sound financial health and reasonable valuation.
Why DECK Fits the GARP Approach
- Strong Earnings Growth: DECK has delivered an impressive 5-year average EPS growth of 27.07%, well above the 15% minimum threshold in Lynch’s strategy. This reflects sustained profitability.
- Attractive Valuation: With a PEG ratio (5Y) of 0.89, the stock is priced reasonably relative to its growth, aligning with Lynch’s preference for PEG ratios below 1.
- Healthy Financials: The company boasts a robust ROE of 35.81%, indicating efficient use of shareholder capital. Additionally, it carries no debt (Debt/Equity = 0), a rare strength in its industry.
- Liquidity Strength: A current ratio of 3.17 ensures ample short-term financial flexibility, far exceeding Lynch’s minimum requirement of 1.
Fundamental Highlights
DECK scores an 8/10 in our fundamental analysis, excelling in profitability and financial health. Key takeaways:
- Profitability: Exceptional margins, with a 19.14% net profit margin and 23.51% operating margin, both ranking near the top of its industry.
- Growth Outlook: Revenue and EPS are expected to grow at double-digit rates annually, though slightly slower than historical trends.
- Valuation: While the P/E ratio of 20.88 appears elevated, the PEG ratio suggests the growth potential justifies the price.
For a deeper dive, review the full fundamental analysis report.
Our Peter Lynch Strategy screener lists more stocks matching these criteria, updated daily.
Disclaimer
This is not investing advice! The article highlights observations at the time of writing, but always conduct your own analysis before making investment decisions.
NYSE:DECK (6/10/2025, 1:02:04 PM)
110.16
-0.75 (-0.68%)
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