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.
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.