Learn about the latest S&P 500 stocks subject to a stock split. They’re up 12,870% since the IPO, and Wall Street says they’re still worth buying.

The S&P500 is the most popular stock index in the USA, covering the 500 largest companies listed on the stock exchange in the country. Given the scope of its membership, many investors consider it the most reliable indicator of overall stock market performance. To be included in the S&P 500 Index, a company must meet the following criteria:

• Be based in the USA
• Have a market capitalization of at least $8.2 billion.
• Hold at least 50% of the issued shares available for trading.
• Be GAAP profitable in the most recent quarter.
• Be profitable over the previous four quarters cumulatively.

Deckers outdoors (DECK -0.55%) is one of the newest S&P 500 companies, joining the index on March 18 and one of only 11 companies to be added to the index this year. Moreover, the outdoor footwear and apparel specialist recently completed a 6-to-1 forward stock merger, typically reserved for companies with a track record of strong business and financial performance. Since going public 21 years ago, Deckers shares have risen 12,870% (as of this writing) as the company has navigated the vagaries of the ever-changing outdoor apparel market. These results are not relegated to the distant past either. Over the last five years, Deckers stock has increased 548%.

Despite the impressive growth, many Wall Streeters believe that additional profits can be made. Let’s take a look at why Deckers has been so successful and what the future holds.

From humble beginnings

Deckers entered surf culture in the early 1970s, creating comfortable yet stylish sandals that soon became a staple among California surfers. From these humble beginnings, Deckers has charted an international path, focusing on niche offerings with a broad reach. Its iconic footwear brands include Hoka, Ugg, Teva, Ahnu and Koolabura. The company’s growing line of performance footwear, strong brands and reputation for comfort have made Deckers international success.

These factors helped the company generate impressive financial results, and the past year pushed the share price to new heights. After achieving record sales and profitability in fiscal year 2024 (ended March 31), Deckers started the year with a bang.

In the first quarter of fiscal 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%. %. As if that wasn’t enough to attract shareholder attention, Deckers raised its full-year profit forecast to $30.20 halfway through its guidance, which would represent a new record for performance.

The enduring appeal of Deckers footwear has taken the company to new heights, and it looks like it will continue to do so. The company takes market share from larger competitors. Moreover, even as competitors lower prices and offer discounts to attract customers, Deckers sells its most popular brands at full retail prices.

Last fiscal year, sales for luxury lifestyle brand Ugg rose 16% to $2.2 billion, while high-end running shoe brand Hoka grew 28% to $1.8 billion and shows no signs of slowing down. Deckers is drawing on the experience of its most popular brands to reinvigorate sales of other brands. The company is also working to expand international and direct-to-consumer sales, and these efforts could improve its performance for the foreseeable future.

There’s another reason for investors to be excited. Since the company began stock buybacks in 2012, Deckers has reduced its share count by nearly 34%, giving shareholders an even larger share of the earnings pie. During the first quarter, the company repurchased $152 million worth of stock, and its current repurchase authorization is approximately $790 million.

Data according to YCharts

Analysts remain bullish on Deckers

Wall Street is known for its diverse group of opinions, so it’s worth noting that the majority of analysts covering Deckers believe there’s still growth ahead. Of the 22 analysts who covered the stock in September, 16 rated it a buy or strong buy, and none recommended a sell. Moreover, the average price target of around $179 suggests Deckers stock has a 15% upside from Tuesday’s closing price.

The biggest bull among his Wall Street peers, however, is UBS analyst Jay Sole, with a buy rating and a split-adjusted top price target of $225 on the Street. This suggests potential gains for investors of 45% compared to Tuesday’s closing price. The analyst cites Deckers’ good quarterly results and continued high demand for its Hoka and Ugg brands.

Despite the stock’s relentless rise in value over the past few years, it remains attractively priced and is trading at approximately 30 times the current multiple of the S&P 500 – despite a significant and growing margin of outperforming the index in recent years. Perhaps more importantly, consensus analyst estimates project Deckers’ EPS to be $6.05 for the next fiscal year, so the stock will trade for less than 26 times next year’s earnings – an even better bargain.

That’s why it’s worth buying Deckers shares.