Deckers Outdoor is Monday's pick for IBD 50 Growth Stocks To Watch as the maker of Hoka shoes and Ugg boots is building the right side of a cup base with an earnings report right around the corner. Deckers stock holds a best-possible 99 Earnings Per Share Rating and a 97 Composite Rating from Investor's Business Daily.
The footwear stock was added to the elite IBD 50 and Big Cap 20 Friday as shares jumped 6.4%. But the stock gave back much of that gain Monday, as stocks were weak and Seaport Global Securities downgraded Deckers stock to neutral from buy.
Along with Hoka shoes and Ugg boots, Deckers' brands include Teva sandals. Deckers ranks No. 2 out of 11 stocks in the Apparel-Shoes & Related Manufacturing group, which holds the No. 96 spot out of the 197 industry groups IBD tracks.
Deckers Stock Finds Resistance In Base
Shares closed above a resistance level around 163 on Friday's move but fell back below it in Monday's pullback in heavy volume. Deckers stock tested its 21-day exponential moving average seeking support, but so far has held above its 50-day moving average, according to MarketSurge chart analysis.
Deckers stock had a 6-for-1 split effective Sept. 17, after the market close. Shares are in a cup base with a 184.48 buy point, which is its all-time high reached on June 3.
Its relative strength line has dipped and flattened out since its June peak.
Even after Monday's retreat, shares have climbed around 39% so far this year. Its 1.5 Up/Down Volume Ratio indicates demand for Deckers stock over the last 50 days.
Sales Growth Tapers But Continues To Rise
Earnings growth has been robust over the last six quarters with an 88% increase in its latest quarter. But profit forecasts show growth slowing or declining over the next three quarters compared with prior-year, high-growth quarters.
Sales growth ranged from 16% to 25% over the last four quarters. Forecasts call for current-quarter sales to rise 10% then ramp up to 13% over the next four periods.
Fiscal 2025 profit estimates look to increase a modest 5% after an impressive 50% lift in fiscal 2024. And analysts see its 2026 earnings rising 14%.
Deckers is expected to report its fiscal second-quarter results around Oct. 24.
Deckers stock's score of 6 in its IBD Earnings Stability factor highlights its steady earnings over the last three to five years, with a lower number being better.
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