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Are Investors Undervaluing Deckers (DECK) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Deckers (DECK - Free Report) is a stock many investors are watching right now. DECK is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 10.77. This compares to its industry's average Forward P/E of 29.14. Over the past 52 weeks, DECK's Forward P/E has been as high as 20.55 and as low as 10.77, with a median of 17.30.

We also note that DECK holds a PEG ratio of 0.87. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. DECK's PEG compares to its industry's average PEG of 2.24. Over the past 52 weeks, DECK's PEG has been as high as 1.96 and as low as 0.87, with a median of 1.44.

Finally, we should also recognize that DECK has a P/CF ratio of 9.63. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. DECK's current P/CF looks attractive when compared to its industry's average P/CF of 27.63. DECK's P/CF has been as high as 17.49 and as low as 9.63, with a median of 14.52, all within the past year.

These are only a few of the key metrics included in Deckers's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, DECK looks like an impressive value stock at the moment.


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