Famed investor Jim Cramer says Deckers Outdoor Corp (NYSE: DECK) is “overly hated” as the stock tumbled on the management’s lukewarm future guidance on Friday.
The footwear designer and distributor came in ahead of Street estimates for its Q2 this morning – but said macro risks, especially tariffs-driven price increases, could hurt sales moving forward.
In a segment of CNBC today, Cramer himself agreed that “UGG isn’t doing that well, HOKA isn’t doing well – there’s elevated competition, and macro uncertainty” facing the Goleta-headquartered firm.
Still, he’s of the view that many of these headwinds are already priced into Deckers’ stock at current levels.
Including the post-earnings decline, shares of the company are down roughly 60% versus its year-to-date high.
Should you buy the post-earnings dip in Deckers stock?
Jim Cramer floated a contrarian thesis on DECK shares today: if winter arrives early and hits hard, UGG sales could snap back, giving the company a seasonal tailwind.
He acknowledged that HOKA is indeed facing pressure from rivals like Nike and New Balance – but emphasised the brand still holds strong appeal among performance-focused consumers.
More importantly, while the management’s downwardly revised guidance sure is underwhelming, it isn’t disastrous, he argued – recommending long-term investors to bet on a potential rebound in demand.
Note that the former hedge fund manager has previously said “Nike should be scared about DECK” – and on Friday, his takeaway again was clear: don’t sell the rip in Deckers shares since weather and fashion cycles could soon turn favourable.
DECK shares are trading at a compelling valuation
Cramer’s constructive view on Deckers stock, for the most part, is premised on valuation, which he believes is rather compelling following the post-earnings plunge.
“It’s got to feel kind of like Lululemon Athletics, but LULU is expensive, and this company – it’s just alright.”
At the time of writing, DECK stock is going for a forward price-to-earnings (P/E) multiple of less than 16 – sharply below 42 for Nike shares.
That’s partly why Wall Street continues to rate it at “overweight” with price targets going as high as $157, indicating potential “upside” of another 75% from current levels.
DECK does not currently pay a dividend, though.
Wall Street agrees with Cramer on Deckers Outdoor
DECK stock post-earnings plunge reflects broader macro uncertainty and heightened competition in both fashion and footwear.
But as Cramer pointed out, it has already been punished more than it deserves and may, therefore, be nearing a bottom now.
The lack of enthusiasm around its future outlook doesn’t necessarily mean the business is broken – it may simply signal prudence while navigating a tough retail environment.
For investors willing to look past short-term noise, Deckers shares offer a mix of seasonal upside, brand resilience, and valuation support.
As the Mad Money host put it – “I think it’s overly hated” – and that might be the best reason to keep it on your radar.
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