Ive been going through Schwab’s list of A picks this week and $\`DECK stood out to me. Honestly, when I first saw the ticker I thought "is this black and decker?" It turns out they are the shoemaker behind Uggs and Hoka...I never got the appeal of uggs, but i knew Hoka were a good brand of running shoes but that was about it...looking behind the A rating on Schwab, i found a company that i decided to put a little of my own money in because im pretty impressed with what I found
The market is focused on tariffs, not fundamentals
Since early 2025 share price has roughly been cut in half as investors woeey sbout tariffs and margin pressure. These concerns certainly are real i think the sell-off has gone too far.
The stock trades around 13x forward p/e, we'll below their historically average of 23x. For a company still expecting to grow revenue, this stood out to me like a sore thumb (or maybe a sore toe for a shoe brand lol)
Hoka is growing
Hoka grew nearly 16% last fiscal year
Management continues to expand the brand globally
The brand is taking share in the premium athletic footwear market
Hoka is expected to surpass ugg as their biggest brand
Ugg is still a strong brand
Ugg grew around 8% last year demonstrating that the brand had pricing power and loyalty
Margins are still good
Tariffs will continue to pressure Margins in FY27 but evrn with expected compression, operating margins are projected around 22% vs 16% pre pandemic
This is important because revenue is growing, Margins remain above historical levels, and the company generates significant cash flow
Balance sheet looks great
No debt
Approx $1.6b in cadh. Purchased $1.1b in stocks last year
Recently authorized an additional \`$3.5b in buybacks
Management had tremendous flexibility to continue returning capital while investing in growth
Valuation looks compelling
• current p/e 13x
• historical p/e 23x
• analysts price targets around $\`165
• DCF estimates place intrinsic value around \`$150
I acknowledge there are weaknesses like the tariffs, possible supply chain disruptions, potential consumer spending weakness and Hoka may become too big a piece of the pie.
Im definitely not advocating this as a buy and hold forever stock, but these details made it compelling enough to put some money in it