Deckers Outdoor Stock Faces Risks from High Valuation and Slowing Earnings Growth
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Deckers Outdoor's high P/E ratio of 28.1x suggests its shares may be overvalued compared to broader market (P/E under 16x) and earnings outlook
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The company has shown strong recent earnings growth of 41% last year and 114% over 3 years
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However, earnings are expected to slow, growing just 9.1% yearly over the next 3 years versus 13% market growth
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Investors seem overly optimistic/bullish on the stock and willing to pay a high premium despite decelerating earnings
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The high valuation suggests shares risk declining if growth slows further, putting investments at significant risk