Deckers Outdoor's (NYSE:DECK) 50% CAGR outpaced the company's earnings growth over the same five-year period

Simply Wall St
·3 min read

Long term investing can be life changing when you buy and hold the truly great businesses. And we've seen some truly amazing gains over the years. Don't believe it? Then look at the Deckers Outdoor Corporation (NYSE:DECK) share price. It's 657% higher than it was five years ago. And this is just one example of the epic gains achieved by some long term investors. It's also up 9.7% in about a month. But this could be related to good market conditions -- stocks in its market are up 6.5% in the last month. It really delights us to see such great share price performance for investors.

Since the stock has added US$450m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

See our latest analysis for Deckers Outdoor

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Over half a decade, Deckers Outdoor managed to grow its earnings per share at 35% a year. This EPS growth is lower than the 50% average annual increase in the share price. This suggests that market participants hold the company in higher regard, these days. And that's hardly shocking given the track record of growth.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

earnings-per-share-growth
earnings-per-share-growth

It is of course excellent to see how Deckers Outdoor has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling Deckers Outdoor stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's good to see that Deckers Outdoor has rewarded shareholders with a total shareholder return of 56% in the last twelve months. That gain is better than the annual TSR over five years, which is 50%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Deckers Outdoor is showing 1 warning sign in our investment analysis , you should know about...

But note: Deckers Outdoor may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting

Recommended Stories

  • Rick Rule: This one asset will be vital during the 'dramatic reckoning' — and you probably already own it

    Protecting your portfolio is simpler than you think.

  • Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought

    ARK Invest went shopping on Thursday, including two stocks taking big hits after reporting disappointing earnings this week.

  • In a market full of crazy swings, Warren Buffett's 'bargain' ideas might have the best upside

    Boring is often better. Especially at a discount.

  • A Huge Pension Sold Netflix, Bank of America, and Intel Stock. Here’s What It Bought.

    State Teachers Retirement System of Ohio sold Netflix, Bank of America, and Intel stock in the third quarter. It bought Alibaba shares.

  • 2 Big Dividend Stocks Yielding 7%; JMP Says ‘Buy’

    Are we running with the bulls? The three main indexes, the Dow, the S&P 500, and the NASDAQ, are all at or near their all-time highs. They’re experiencing a run-up after a ‘September swoon’ that reversed in early October. The key point here is not so much the market lows or highs, but the volatility it’s been experiencing in getting there. Sharp swings within a general trend make it difficult to predict the market’s short-term moves. The natural play to counter market volatility is to shore up t

  • Not FAANG but MAMAA: Jim Cramer reveals new acronym for the 5 largest tech giants

    With Facebook’s rebrand to Meta, the acronym for the five biggest American tech companies changes from FAANG to MAMAA, according to the acronym’s inventor, Mad Money’s Jim Cramer.

  • Stimulus Money Could Cause the Stock Market to Plunge 15% by November

    Scott Minerd, global chief investment officer for financial firm Guggenheim, predicts that the stock market could drop 15% by November, according to a report by Business Insider. He blames the...

  • 3 Top Stocks I Plan to Buy in November

    A panel of Motley Fool contributors discusses what stocks they are planning to buy in November, historically a strong month for the market.

  • These Two Stocks Could 10X in 10 Years

    Immense returns can take time, but these two stocks provide exciting opportunities for patient investors.

  • Lucid Group Keeps Delivering on Its Promises

    Share prices of Lucid Group (NASDAQ: LCID) are up a staggering 38% in the last week. While some of the gains could be correlated with Tesla passing $1 trillion in market cap for the first time in its history, the bigger news for electric vehicle (EV) maker Lucid is that it's set to deliver the first wave of Lucid Air Dream Editions to customers this weekend. While it's true that Lucid has high expectations, even for a growth stock, the company deserves credit for hitting its goals on time.

  • AbbVie, Exxon Mobil, and Other Companies That Raised Their Dividends This Week

    Exxon Mobil and AbbVie were among the large U.S. companies that announced dividend increases this week, while Ford Motor reinstated its quarterly payout. Exxon Mobil (ticker: XOM) declared a quarterly dividend of 88 cents a share, up by a penny or about 1%. It marked the first quarterly dividend increase for the energy giant since April 2019 when it went from 82 to 87 cents a share.

  • 3 Stocks to Buy Hand Over Fist If a Stock Market Crash Occurs

    Trouble may be brewing on Wall Street, but that's actually great news for opportunistic long-term investors.

  • Double Your Money by 2033 on Dividends Alone from This Top Energy Stock

    Kinder Morgan's slow and steady business model is centered on creating shareholder value through dividends, not high growth. As with most dividend stocks, the success of that strategy will depend on whether the company can continue to fund and raise its payouts over time without taking away too much of the cash it requires to run its business. Let's see if Kinder Morgan fits this criterion and is worth buying today.

  • Cathie Wood's $500K Bitcoin call is already happening — how to ride the wave to half a million

    Wood's wild prediction for Tesla came true. This one could, too.

  • Buy Intel Before INTC Stock Rebounds Soon

    Ahead of Intel’s (NASDAQ:INTC) recently posted third-quarter results, the stock rallied, in accordance with its tradition. INTC stock rose steadily from $52 to $56 ahead of its earnings, only to plunge and close below $50 after the results were released. Source: Kate Krav-Rude / Shutterstock.com Why did investors bet that Intel would beat analysts’ average expectations when the chip maker is falling behind its competitors? The giant used to sell premium processors. Advanced Micro Devices (NASDAQ

  • Trending Today: When Does Rivian Go Public? What Is the Rivian Ticker Symbol?

    Rivian is trending today as investors seek answers to when does it go public and what the company’s ticker symbol is going to be. Source: Michael Vi / Shutterstock The last update we got from Rivian concerning its IPO plans was last week in a filing with the U.S. Securities and Exchange Commission (SEC). The company is aiming to go public in 2021 but hasn’t nailed down a specific date just yet. The easier question to answer is what ticker symbol will Rivian use for its stock. The company’s SEC f

  • 2 Toxic Cryptocurrencies to Sell Right Now

    Shiba Inu (CRYPTO: SHIB) and Dogecoin (CRYPTO: DOGE) are up 40% and 1,000%, respectively, over the last 30 days. Founded in August 2020 by an anonymous developer called Ryoshi, Shiba Inu token is carefully designed to exploit popular dog memes on the internet. Shiba Inu's October rally has little fundamental support.

  • 7 High-Yield Retirement Stocks To Feather Your Nest Egg

    While dividend yields have partially declined of late due to rallying stock prices, it’s still possible to find attractive high-yield retirement stocks on Wall Street. These businesses typically generate stable cash flow, boast strong balance sheets, and have reasonable dividend payout ratios. As a result, these companies have the financial resilience to grow their businesses while consistently paying attractive dividends. Given the bullish momentum in this earnings season, I’ll discuss seven re

  • Buy SAVA Stock on Dips as its Phase 3 Trial Moves Along

    Is the recent pullback in Cassava Sciences (NASDAQ:SAVA) a sign that it’s time to give up on this risky biotech play? Or, is it an opportunity to enter and/or add to a position in SAVA stock, at a more favorable price? Source: Pavel Kapysh / Shutterstock.com I would say the latter. Yes, this is a very speculative stock. If it fails to make further progress with its Alzheimer’s treatment, Simulfilam? Shares could see a tremendous drop in price. But a year or so down the road, once the data from i

  • Kinder Morgan's Capital Discipline Illustrates Why It's a Great Dividend Stock

    Pipeline giant Kinder Morgan (NYSE: KMI) is spending a lot less money than it used to. The company reported Q3 2021 earnings on Oct. 20, and signaled that it plans to keep a tight lid on spending. Here's why its strategy is great news for investors interested in collecting and counting on Kinder Morgan's 6% dividend yield.