Deckers Outdoor (DECK) Hits A 52-Week High, Can The Run Continue?

Have you been paying attention to shares of Deckers Outdoor Corporation (NYSE:DECK) ? Shares have been on the move with the stock up 3.46% over the past month. DECK hit a new 52-week high of $98.73 in the previous session. Deckers Outdoor has gained 22.48% since the start of the year compared to the 4.57% move for the Consumer Discretionary sector and the 4.33% year-to-date return for its peer group.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on February 1, 2018, Deckers Outdoor reported EPS of $4.97 versus the Zacks Consensus Estimate of $3.84 while it beat the consensus revenue estimate by 8.03%.

For the current fiscal year, Deckers Outdoor is expected to post earnings of $5.43 per share on $1.88 billion in revenues. This represents a 42.15% change in EPS on a 5.02% change in revenues. For the next fiscal year, the company is expected to earn $6.01 per share on $1.93 billion in revenues. This represents changes of 10.61% and 2.48%, respectively.

Valuation Metrics

Deckers Outdoor may be at a 52-week high right now, but what might the future hold for DECK? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

Deckers Outdoor has a Value Score of B. The stock's Growth and Momentum Scores are A and F, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 18.1x current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 10.82x versus its peer group's average of 17.18x. Additionally, the stock has a PEG ratio of 1.56. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Deckers Outdoor Corporation Price and Consensus

Deckers Outdoor Corporation Price and Consensus | Deckers Outdoor Corporation Quote

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Deckers Outdoor currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 or 2 (Buy) and Style Scores of A or B, it looks as if Deckers Outdoor fits the bill. Thus, it seems as though DECK shares could have potential in the weeks and months to come.

How Does Deckers Outdoor Corporation Stack Up to the Competition?

Shares of Deckers Outdoor have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also looking good, including WWW, CRI, and RL, all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.

The Zacks Industry Rank is in the top 22.26% of all the industries we have in our universe, so it looks like there are some nice tailwinds for DECK, even beyond its own solid fundamental situation.