Meet the Newest Stock-Split Stock in the S&P 500. It’s up 12,870% since its IPO, and Wall Street says it’s still a buy right now.

The S&P 500 is the most watched stock index in the US and is made up of the 500 largest publicly traded companies in the country. Given the breadth of its 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 US
• 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 for the past four quarters.

Outdoor deckers (DECK -0.55%) is one of the most recent additions to the S&P 500, joining the fold on March 18, one of 11 companies added to the index so far this year. In addition, the footwear and outdoor apparel specialist recently completed a 6-for-1 stock split, typically reserved for companies with years of business and strong financial results. Since going public 21 years ago, Deckers shares are up 12,870% (as of this writing) as the company has navigated the vagaries of the ever-changing outdoor apparel market. Those results are not relegated to the distant past either. Over the past five years, Deckers shares are up 548%.

Despite its impressive growth, many on Wall Street believe there are additional gains to be had. Let’s see why Deckers has been so successful and what the future holds.

Image source: Getty Images.

From humble beginnings

Deckers got its start in surf culture in the early 1970s, creating a comfortable yet stylish sandal that soon became a staple among California surfers. From those humble beginnings, Deckers has forged a multinational path by focusing on niche offerings with broad appeal. Its flagship footwear brands include Hoka, Ugg, Teva, Ahnu and Koolabura. The company’s expanding line of performance footwear, strong brands and reputation for comfort have catapulted Deckers to international success.

These factors have helped the company generate impressive financial results, and last year pushed the stock to a new zenith. After posting record sales and profitability during fiscal 2024 (ended March 31), Deckers has started the year with a bang.

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

The enduring appeal of Deckers footwear has propelled the company to new heights, and it looks set to continue. The company has taken market share from its larger rivals. Furthermore, even as the competition lowers prices and offers discounts to attract customers, Deckers sells its most popular brands at full retail prices.

Last fiscal year, sales of the company’s luxury lifestyle brand Ugg rose 16 percent to $2.2 billion, while its high-end Hoka running shoe brand rose 28 percent. , up to $1.8 billion and showing no signs of slowing down. Deckers is taking the lessons learned from its most popular brands to reignite sales of its other brands. The company is also working to expand its international and direct-to-consumer sales, and these efforts could increase results in the near future.

There’s another reason for investors to be excited. Since the company began buying back shares in 2012, Deckers has reduced its share count by nearly 34%, giving shareholders an even bigger slice of the earnings pie. The company repurchased $152 million worth of shares in Q1 and has approximately $790 million remaining in its current repurchase authorization.

Data by YCharts

Analysts are still bullish on Deckers

Wall Street is notorious for its diverse group of opinions, so it’s worth noting that most analysts covering Deckers think there’s still a step ahead. Of the 22 analysts who covered the stock in September, 16 rate it a buy or strong buy, and none recommend a sell. Additionally, an average price target of about $179 suggests Deckers shares have a 15% upside to Tuesday’s close.

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

Despite the stock’s relentless rise over the past few years, it’s still attractively priced, selling for about 30 times earnings, matching the current multiple of the S&P 500 — despite outperforming the index by a wide and rising margin in recent years. Perhaps more importantly, analysts’ consensus estimates call for EPS of $6.05 for Deckers next fiscal year, so the stock is selling for less than 26 times next year’s earnings — an even better deal.

That’s why Deckers stock is a buy.