Since July 2025, Deckers has been in a holding pattern, posting a small return of 1.4% while floating around $107.23. The stock also fell short of the S&P 500’s 10.8% gain during that period.

Is now the time to buy Deckers, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free for active Edge members.

Why Do We Think Deckers Will Underperform?

We're swiping left on Deckers for now. Here are three reasons you should be careful with DECK and a stock we'd rather own.

1. Weak Constant Currency Growth Points to Soft Demand

In addition to reported revenue, constant currency revenue is a useful data point for analyzing Footwear companies. This metric excludes currency movements, which are outside of Deckers’s control and are not indicative of underlying demand.

Over the last two years, Deckers’s constant currency revenue averaged 16% year-on-year growth. This performance was underwhelming and suggests it might have to lower prices or invest in product improvements to accelerate growth, factors that can hinder near-term profitability.

2. Weak Operating Margin Could Cause Trouble

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Deckers’s operating margin might fluctuated slightly over the last 12 months but has generally stayed the same, averaging 23.4% over the last two years. This profitability was lousy for a consumer discretionary business and caused by its suboptimal cost structure.

3. Mediocre Free Cash Flow Margin Limits Reinvestment Potential

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

Deckers has shown poor cash profitability over the last two years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 18.5%, lousy for a consumer discretionary business.

Final Judgment

We see the value of companies helping consumers, but in the case of Deckers, we’re out. With its shares trailing the market in recent months, the stock trades at 17× forward P/E (or $107.23 per share). This valuation multiple is fair, but we don’t have much confidence in the company. There are better stocks to buy right now. We’d recommend looking at our favorite semiconductor picks and shovels play.

Stocks We Like More Than Deckers

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