Deckers Outdoor Corporation (NYSE:DECK) defied analyst predictions to release its third-quarter results, which were ahead of market expectations.
It was overall a positive result, with revenues beating expectations by 7.3% to hit US$1.6b. Deckers Outdoor also reported a statutory profit of US$15.11, which was an impressive 30% above what the analysts had forecast.
This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
NYSE:DECK Earnings and Revenue Growth February 4th 2024
Following the latest results, Deckers Outdoor's 20 analysts are now forecasting revenues of US$4.65b in 2025. This would be a solid 13% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 4.9% to US$29.52. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$4.53b and earnings per share (EPS) of US$27.52 in 2025. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 17% to US$878per share.
Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Deckers Outdoor analyst has a price target of US$1,150 per share, while the most pessimistic values it at US$525. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Deckers Outdoor's past performance and to peers in the same industry. We would highlight that Deckers Outdoor's revenue growth is expected to slow, with the forecast 10% annualised growth rate until the end of 2025 being well below the historical 16% p.a. growth over the last five years.
Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.1% per year. So it's pretty clear that, while Deckers Outdoor's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.