2024-02-05 07:25:04 ET
Summary
- Deckers' stock has surged by 42% since my recent article, following a remarkable rally and Q3 results.
- The company's sustained high returns on capital and growth in top line and margins contribute to its success.
- The main risk for Deckers is the potential loss of relevance in the fiercely competitive fashion industry.
- In my view, despite its qualities, at current prices, the risk is significant for long-term-oriented investors.
Opener
In November, I published an article on Deckers ( DECK ), endorsing it as a great company and an opportunity to acquire a high-quality, well-managed, and growing firm at a reasonable price. I rated it a strong buy. Since then, the stock has surged by 42%, following a remarkable rally and Q3 results. What I anticipated has materialized—the multiple has significantly expanded from around 27 TTM PE to 38 now. The market recognized the opportunity and seized it....
Read the full article on Seeking Alpha
For further details see:
Deckers: Post-Surge, The Long-Term Risk Outweighs The Reward (Rating Downgrade)