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How DECK’s Forward PE Stacks Up against Its Peers’

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Updated

Forward PE

The forward PE multiple is one of the most important metrics investors use when making investment decisions.

As of January 24, Deckers Outdoor (DECK) was trading at a 12-month forward PE multiple of 16.9x. In comparison, Nike (NKE), Skechers (SKX), and Foot Locker (FL) were trading at PEs of 27.2x, 13.0x, and 11.5x, respectively.

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EPS projections

In fiscal 2019, Wall Street analysts expect Deckers’s adjusted EPS to rise 20.4% YoY (year-over-year) to $6.91. In fiscal 2020, analysts expect the company’s adjusted EPS to rise 6.7% YoY to $7.38.

Deckers’s bottom line growth is expected to be supported by higher sales and a decreased tax burden. In the trailing five quarters, Deckers has beaten analysts’ adjusted EPS estimates in every quarter. Deckers’s management expects its fiscal 2019 EPS to be $6.65–$6.85.

Share repurchases also offer upside potential to EPS. Deckers has an extensive share repurchase program in place. In the second quarter of fiscal 2019, it repurchased $125 million worth of its stock, taking its total buybacks to $135 million in the first half. It held $116 million worth of its stock as of September 30, 2018.

Peers’ EPS projections

Analysts expect Nike’s adjusted EPS to rise 11.1% YoY to $2.65 in fiscal 2019. In 2020, they expect its EPS to rise 18.4% YoY to $3.14. Its management hasn’t provided any outlook on its EPS.

In 2018, analysts expect Skechers’ adjusted EPS to rise 3.4% to $1.84. In 2019, they expect its EPS to rise 8.2% to $1.99.

In fiscal 2018, analysts expect Foot Locker’s (FL) EPS to rise 11.0% to $4.56, and in fiscal 2019, they expect its EPS to rise 8.1% to $4.93.

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