UBS calls Hoka sneaker maker a ‘significantly underappreciated growth stock’
Now may be the time to snap up shares of Deckers Outdoors following a painful year-to-date selloff, according to UBS. In a Friday note, the bank reiterated its buy rating on the footwear manufacturer, whose portfolio of brands includes Ugg, Hoka and Teva. Analyst Jay Sole’s 12-month price target of $158 implies that the stock could rally nearly 32% from Friday’s close of $119.63. Shares of Deckers have stumbled 41% this year. DECK YTD mountain DECK YTD chart Sole said the stock’s pullback may present an attractive entry point for investors. “We see a very good opportunity to buy shares in a growth company currently significantly undervalued by the market,” he wrote. One reason for Sole’s increased price target was a higher probability that Deckers’ earnings will grow in the next few years. “We currently model FY28 EPS of $7.90 but now see a greater probability our $10.00 upside case plays out,” Sole said. “DECK has multiple growth drivers which when looked at in total create a more compelling outlook than we previously realized.” Sole specifically pointed to strong sales growth potential for Deckers’ Hoka sneakers brand. He said there are emerging opportunities to expand in new verticals such as lifestyle, apparel, training and recovery, as well as “major” geographic expansion opportunities in Asia and Europe. Momentum also exists for the company to grow its global store count, he said. Meanwhile, Sole also emphasized Decker’s recent increases in its marketing investments as a percentage of sales to more than 10%. U.S. brand momentum for Hoka remains strong, and any tariff-related risks doesn’t dull Sole’s “enthusiasm for the big picture story,” he said. The analyst added that Hoka’s “max cushioning” shoe trend is one that likely has legs to stay relevant with consumers over the long run.
<
