Deckers Outdoor Corporation (DECK): A Bull Case Theory

We came across a bullish thesis on Deckers Outdoor Corporation on Value investing subreddit by stockoscope. In this article, we will summarize the bulls’ thesis on DECK. Deckers Outdoor Corporation's share was trading at $99.06 as of October 16th. DECK’s trailing and forward P/E were 15.94 and 16.45 respectively according to Yahoo Finance.

Deckers (DECK) has declined 52% from its January 2025 high of $223.98 to $105.77 despite reporting record revenue and earnings, with market concerns focused on tariff risks, weaker guidance, and slowing growth in both UGG and Hoka. This dislocation presents an intriguing case for a disciplined DCF analysis.

Using analyst consensus forecasts, our model estimates an initial 12.4% growth rate, gradually tapering to 3% over ten years, avoiding abrupt shifts common in traditional two-stage models. Applied to a 22.3% EBITDA margin reflecting DECK’s historical efficiency and pricing power, and discounted at a 7.2% WACC calculated via Damodaran’s methodology, the model produces a $31.3 billion enterprise value, with 71% derived from terminal value.

After adjusting for net cash, the equity value is $32.9 billion, or $215.8 per share, implying a 104% upside from current levels. Sensitivity testing shows that even under a more conservative 8% growth scenario, upside remains 66%, though raising the discount rate above 10% nearly eliminates the gap, highlighting valuation sensitivity to risk assumptions. While the DCF suggests the market may be underpricing DECK’s fundamentals, more than 70% of the value hinges on long-term execution, competitive positioning, and macro uncertainties like tariffs and geopolitics.

This indicates that the stock’s depressed price largely reflects sentiment rather than operational weakness. As a result, DECK represents a potential value opportunity for investors comfortable with long-term assumptions, though it is not a guaranteed “buy” and requires careful consideration of embedded risks and the company’s ability to sustain growth over a decade.

Previously we covered a bullish thesis on Deckers Outdoor Corporation (DECK) by Quality Stocks in April 2025, which highlighted strong revenue growth from UGG and Hoka, strategic buybacks, and potential entry points amid tariff risks. The company's stock price has depreciated approximately by 3.84% since our coverage. The thesis still stands as DECK’s brands remain resilient. Stockoscope shares a similar thesis but emphasizes a disciplined DCF analysis, highlighting long-term upside and sentiment-driven dislocations.

Deckers Outdoor Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 59 hedge fund portfolios held DECK at the end of the second quarter which was 63 in the previous quarter. While we acknowledge the potential of DECK as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW 

Disclosure: None.