Check out the most recent stock split in the S&P 500. It’s soared 12,870% since its IPO, and Wall Street says it’s still a Buy right now.

THE S&P500 is the most followed stock index in the United States and includes the 500 largest publicly traded companies in the country. Given its broad membership, many investors consider it the most reliable indicator of overall stock market performance. To be included in the S&P 500, a company must meet the following criteria:

• Be based in the United States
• Have a market capitalization of at least $8.2 billion.
• Have at least 50% of its outstanding shares available for trading.
• Be profitable on a GAAP basis in its most recent quarter.
• Be profitable, overall, over the previous four quarters.

Exterior decks (BRIDGE -0.55%) is one of the most recent additions to the S&P 500, joining the fold on March 18, one of only 11 companies to be added to the index so far this year. Additionally, the footwear and outerwear specialist recently completed a 6-for-1 forward stock split, typically reserved for companies with years of strong business and financial results. Since its IPO 21 years ago, Deckers shares have soared 12,870% (as of this writing), as the company has navigated the ups and downs of the ever-changing outerwear market. evolution. Nor are these results relegated to the distant past. Over the past five years, Deckers stock has jumped 548%.

Despite its impressive rise, many on Wall Street believe additional gains are possible. Let’s take a look at why Deckers has been so successful and what the future holds.

From humble beginnings

Deckers got its start in surf culture in the early 1970s, creating a comfortable yet stylish sandal that quickly became a staple among California surfers. From these humble beginnings, Deckers has charted a multinational path focusing on highly attractive niche offerings. Its iconic shoe brands include Hoka, Ugg, Teva, Ahnu and Koolabura. The company’s growing line of performance footwear, strong brands and reputation for comfort have propelled Deckers to international success.

These factors have helped the company generate impressive financial results and the last year has propelled the stock to a new zenith. After achieving record sales and profitability in its 2024 fiscal year (ended March 31), Deckers is off to a strong start this year.

For its first fiscal quarter 2025 (ended June 30), the company generated revenue of $825 million, up 22% year over year, while its diluted earnings per share ( EPS) of $4.52 soared 87%. If that wasn’t enough to get shareholders’ attention, Deckers raised its full-year profit forecast to $30.20 at the midpoint of its guidance, which would mark a new performance record.

The enduring appeal of Deckers shoes has taken the company to new heights, and it looks set to continue. The company has taken market share from its biggest competitors. Additionally, even though competition cuts prices and offers discounts to attract customers, Deckers sells its most popular brands at full retail price.

In the last fiscal year, sales of luxury brand Ugg soared 16% to $2.2 billion, while those of its high-end running shoe brand Hoka jumped 28% to $1. 8 billion dollars and shows no signs of slowing down. Deckers is learning from its most popular brands to boost sales of its other brands. The company is also working to expand its international and direct-to-consumer sales, and these efforts could improve its results for the foreseeable future.

There’s another reason why investors are excited. Since the company began repurchasing shares in 2012, Deckers has reduced its share count by nearly 34%, giving shareholders an even bigger slice of the profit pie. The company repurchased $152 million worth of stock in the first quarter and has about $790 million remaining on its current repurchase authorization.

Data by YCharts

Analysts remain bullish on Deckers

Wall Street is famous for its diversity of opinions. So it’s worth noting that the majority of analysts who cover Deckers think there’s still upside ahead. Of the 22 analysts who covered the stock in September, 16 rated it a buy or strong buy, and none recommended selling. Additionally, an average price target of around $179 suggests Deckers stock has 15% upside potential from Tuesday’s closing price.

However, UBS analyst Jay Sole is the biggest bull among his Wall Street colleagues, with a Buy rating and a high split-adjusted price target of $225. This suggests potential gains for investors of 45% from Tuesday’s closing price. The analyst cites Deckers’ strong quarterly results and continued strong demand for its Hoka and Ugg brands.

Despite the stock’s relentless rise over the past few years, it remains attractively priced, selling at around 30 times earnings, which is the S&P 500’s current multiple, despite a widely increasing margin relative to the index in recent years. . Perhaps more importantly, analyst consensus estimates call for $6.05 EPS for Deckers over the next fiscal year, so the stock sells for less than 26 times next year’s earnings – a even better deal.

This is why Deckers stock is a buy.