Wednesday's IBD 50 Stocks To Watch pick is the maker of Hoka Shoes, Deckers Outdoor, which is approaching a resistance level on its chart. Deckers stock is building a new base and offers an early buy trigger.
Deckers Outdoor makes the increasingly-popular Hoka shoes and longtime favorite Uggs.
On July 25, Deckers reported strong fiscal first-quarter earnings and sales and raised its full-year earnings outlook. Earnings jumped 88% to $4.52 per share on revenue of $825.4 million. Sales climbed 22% vs. the year-ago period.
Notably, Hoka brand net sales increased nearly 30% to $545.2 million vs $420.5 million in the year-ago period.
Hoka shoes and Ugg continue to "drive robust full-price demand in the global marketplace," said outgoing Chief Executive Dave Powers in the press release.
"Fiscal year 2025 is off to a great start, with Hoka and Ugg delivering fantastic first quarter results that have contributed to our increased outlook for the full fiscal year," said incoming CEO Stefano Caroti.
Earnings are expected to rise 10% in the fiscal year ending next March, according to IBD MarketSurge, with another 14% increase in the next fiscal year.
Be sure to read how to adjust to changing market conditions, with IBD's new exposure levels.
Hoka Shoes Maker At Critical Level
After correcting as much as 27% from its 52-week high on Aug. 6, Deckers stock is rebounding sharply from its long-term 200-day moving average. Shares are attempting to clear their 50-day line, a resistance level that pushed the stock back on July 26.
A decisive retake of this benchmark would likely lead to the formation of the right side of the base. An early buy trigger for aggressive investors is in play at 980, the high on July 26, according to MarketSurge chart analysis.
The stock's relative strength line is rebounding, but remains far from its old highs. That makes sense given the stock has been consolidating since early June. Now, investors should be looking for an ascending RS line during the stock's recovery. That would mean the stock is handily outperforming the S&P 500 as it bounces back.
Due to solid earnings growth in recent quarters and strong price performance year to date, Deckers stock boasts a 97 out of 99 IBD Composite Rating, according to IBD Stock Checkup. The Hoka shoes stock has rallied 41% this year.
With market risk decreasing, investors should be looking to incrementally raise their market exposure. The Hoka shoes maker is among the best stocks to consider.
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Other Stocks To Keep An Eye On
Three recent IBD 50 Growth Stocks To Watch picks are among the best stocks to buy and watch.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| PDD | 164.69 | Cup base | |
| MercadoLibre | 1,792.05 | Cup with handle | |
| Fortinet | 73.91 | Cup base |
Source: IBD Data As Of Aug. 14
Follow Scott Lehtonen on X, formerly known as Twitter, at @IBD_SLehtonen for more on the best stocks to buy and watch and the Dow Jones Industrial Average.
