Needham has increased its price target for Deckers Outdoor (DECK) to $138.00, up from $115.00, while maintaining a Buy rating in response to the company's fiscal third-quarter 2026 performance. Market data show DECK trading at $99.90, a level that, according to a fair-value assessment, may indicate the stock is undervalued relative to its fundamentals.
For the quarter, the footwear company delivered 7% revenue growth and diluted earnings per share of $3.33. Those results outpaced analyst expectations cited ahead of the release - consensus estimates had pointed to roughly 2% revenue growth and an EPS of $2.77. The stock is trading at a price-to-earnings ratio of 14.77, a metric characterized in available data as low when contrasted with near-term expected earnings growth.
Following the quarter, Deckers raised its full-year fiscal 2026 guidance. The company now projects sales growth of 8% to 9%, up from the earlier forecast of 7%, and increased its EPS outlook to a range of $6.80 to $6.85, compared with the prior guidance range of $6.30 to $6.39. Needham adjusted its own earnings estimates accordingly, raising its EPS forecasts for fiscal 2026 and 2027 to $6.85 and $7.48, respectively, from previous estimates of $6.36 and $7.00.
Needham said its more bullish stance reflects accelerating direct-to-consumer (DTC) trends at both of Deckers' brands, robust demand in the wholesale channel, and what it sees as longer-term distribution expansion opportunities for the Hoka brand.
Additional market reactions accompanied the quarterly results. Deckers reported EPS of $3.33, which exceeded a different cited projection of $2.76 and translated to an earnings surprise of 20.65%. Revenue for the quarter reached $1.96 billion versus a forecast of $1.87 billion. Management highlighted positive DTC growth across both the UGG and HOKA franchises as contributors to the quarter's strength.
In the wake of the report, Evercore ISI raised its price target on Deckers from $90.00 to $108.00, describing the quarter as strong overall. BTIG left its rating unchanged at Neutral and noted the balanced nature of Deckers' growth across product lines. Together, these analyst moves and the company's own guidance revision underscore investor and analyst attention on Deckers' sales channels and brand momentum.
Key points:
- Needham raises Deckers' price target to $138 and retains a Buy rating after fiscal Q3 results that beat estimates.
- Deckers reported 7% revenue growth and $3.33 EPS for the quarter, and it lifted full-year fiscal 2026 sales and EPS guidance.
- Other firms updated views: Evercore ISI raised its target to $108, while BTIG kept a Neutral rating.
Risks and uncertainties:
- Future performance depends on sustained direct-to-consumer and wholesale demand; softness in either channel could affect results.
- Analyst expectations and market valuation metrics could shift, altering perceptions of whether the stock is undervalued at current prices.