DECKERS OUTDOOR CORP (NYSE:DECK) – A Strong Contender for Quality Investors

DECKERS OUTDOOR CORP (NYSE:DECK) stands out as a potential candidate for quality investors, meeting key criteria based on revenue growth, profitability, and financial health. The company, known for brands like UGG and HOKA, demonstrates consistent performance and efficient capital allocation.

Why DECK Fits the Quality Investing Profile

• Strong Revenue and EBIT Growth: Over the past five years, DECK has delivered a revenue CAGR of 7.6%, while EBIT growth has been even more impressive at 28.3%, indicating improving profitability.
• High Return on Invested Capital (ROIC): With an ROIC of 103.9%, the company efficiently generates profits from its capital investments, far exceeding the 15% threshold for quality stocks.
• Healthy Financial Position: DECK has no debt, and its free cash flow conversion is strong, with a 97.2% five-year average profit quality—meaning nearly all net income turns into cash.
• Expanding Margins: Operating and profit margins have grown over time, reflecting pricing power and cost management. The operating margin stands at 23.7%, well above industry peers.
• Analyst Confidence: Future revenue growth is expected to remain above 5%, supporting the case for sustained performance.

Fundamental Analysis Summary

DECK earns a 7/10 fundamental rating, with standout scores in profitability (9/10) and financial health (10/10). The company outperforms most competitors in return metrics, margins, and liquidity. While valuation appears reasonable, forward earnings estimates suggest some caution.

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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.