Deckers Outdoor and Levi Strauss have been highlighted as Zacks Bull and Bear of the Day

For Immediate ReleaseChicago, IL – February 21, 2025 – Zacks Equity Research shares Deckers Outdoor DECK as the Bull of the Day and Levi Strauss & Co LEVI as the Bear of the Day. In addition, Zacks Equity Research provides analysis on NVIDIA NVDA and Broadcom AVGO.Here is a synopsis of all four stocks.Bull of the Day:Deckers Outdoor, a Zacks Rank #1 (Strong Buy), is a footwear and apparel company recognized for its premium lifestyle and performance brands. The company designs, manufactures, and sells shoes, sandals, and boots, emphasizing comfort and innovation.The stock has taken a major hit since reporting earnings in late January. Down over 30% from the recent highs, the stock is coming into a big support level that investors should be eyeing.About the CompanyDeckers is valued at $23 billion and employs close to 5,000 people.The company, founded in 1973 and headquartered in Goleta, California, operates a diverse portfolio of footwear and apparel brands catering to both casual and high-performance consumers.In addition to its well-known UGG, HOKA, and Teva brands, the company also offers relaxed casual footwear through Sanuk, fashion-focused casual shoes under Koolaburra, and previously marketed footwear under the AHNU brand.Deckers distributes its products globally through a mix of domestic and international retailers, distributors, and its direct-to-consumer channels, which include e-commerce platforms and company-owned retail stores.The stock has a Zacks Style Score of “A” in Growth, but “D” in Value and Momentum.Q3 Earnings BeatDeckers delivered a strong Q3, beating EPS by 15% and revenue estimates. The company raised full-year guidance across the board, projecting FY25 EPS between $5.75-$5.80 (above the $5.62 consensus) and improving its gross margin outlook to 57% or better.UGG continued to be a standout performer, generating $1.24 billion in revenue (+16.1% YoY), with exceptional holiday sales, strong international demand, and impressive full-price sell-through.HOKA also posted another quarter of rapid expansion, with sales up 23.7% YoY, reinforcing its position as a high-growth performance brand.Management reiterated its commitment to disciplined brand management, avoiding excessive promotions to sustain long-term profitability.Despite the strong report, the stock traded lower due to revenue guidance falling slightly short of estimates ($4.90B vs. $4.93B expected), potential future margin pressure from inflation and FX headwinds, and some weakness in Teva (-6% YoY).Additionally, inventory levels increased to $577 million from $539 million a year ago, which could raise concerns about demand normalization.Estimates Headed HigherAnalysts have lowered their earnings estimates for the upcoming quarter, but continue to raise estimates longer-term.For the current quarter, earnings estimates went from $0.71 to $0.56 after the earnings report. This is a drop of 21% and a major reason why the stock was sold.However, for the current year estimates have improved 6%, going from $5.56 to $5.89.For the next year, analysts now see $6.60, which is up 7% from the $6.14 expected 90 days ago.Deckers Outdoor Corporation price-consensus-chart | Deckers Outdoor Corporation QuoteWhile Deckers remains on track for its fifth consecutive year of mid-teens revenue growth, the market may be reacting to some short-term headwinds.However, with its premium brand positioning, strong direct-to-consumer momentum, and disciplined pricing strategy, Deckers appears well-positioned for continued long-term success.The Technical TakeThe stock reached a high of $224 just before earnings but has since dropped 33%, recently trading around $150. It has now returned to a price range where it moved sideways for much of 2024, with the $140-$160 zone acting as former resistance that could now serve as strong long-term support—making it an attractive entry point for new investors looking to buy the dip.With the 200-day moving average sitting at $170, a relief bounce could test that level in the near term. However, if the stock falls below $135, it may signal deeper underlying issues that could lead to further downside.In SummaryDeckers Outdoor has faced a sharp pullback despite delivering strong Q3 results and raising full-year guidance. While near-term concerns around revenue guidance, margin pressures, and inventory buildup have weighed on the stock, the company remains well-positioned for long-term growth.With UGG and HOKA driving strong sales and analysts raising longer-term earnings estimates, the recent selloff could present a compelling buying opportunity at key technical support levels.Investors with a long-term perspective may find the current dip an attractive entry point into a high-quality, growth-focused footwear leader.Bear of the Day:Levi Strauss & Co is a Zacks Rank #5 (Strong Sell) that is an American clothing company best known for its denim jeans, particularly Levi's brand jeans.The company had previously been privately held for many years, but in 2019, it re-entered the public markets by offering shares on the New York Stock Exchange under the ticker symbol LEVI.The stock debuted at an opening price of $22, but it has struggled to gain momentum over the past five years, with the price currently trading below $19. A recent earnings report has led analysts to revise their earnings estimates downward, further complicating the case for investing in the stock.About the CompanyFounded in 1853, Levi pioneered blue jeans and remains a global leader in denim apparel. In addition to jeans, Levi Strauss produces jackets, shirts, and other casual wear under brands like Levi's, Dockers, Denizen, and Signature by Levi Strauss & Co. The company operates both direct-to-consumer retail stores and wholesales its products worldwide.LEVI is valued at $7 billion and has a Forward PE of 14. The stock holds Zacks Style Scores of “A” in Growth, but “D” in Momentum. It also has an “C” in Value with a Forward PE at 14.Q3 EarningsLevi Strauss reported better-than-expected Q4 earnings, beating EPS by 4%. However, the company guided for FY25 earnings below consensus, with adjusted EPS projected between $1.20 and $1.25, compared to the $1.36 expected by analysts. Revenue is also expected to decline by 1% to 2% year-over-year.While the company highlighted improvements in profitability, including a 13.4% adjusted EBIT margin and a 61.3% gross margin driven by lower product costs and better sales execution, the outlook for FY25 suggests slower growth.Additionally, despite the strong cash flow and organic revenue growth in Q4, the weak revenue guidance and inventory drop of 4% year-over-year may signal potential headwinds.Earnings Estimates FallingSince reporting earnings, LEVI has seen its earnings estimates lowered by analysts.For the current quarter, forecasts have dropped 15% over the past 30 days, from $0.33 to $0.28.Looking at the current year, estimates have declined 8% in that same period, down from $1.39 to $1.27.For the next year, projections have been adjusted downward by 5%, now at $1.39 from $1.47.Technical TakeIt is a troubling sign when the stock is trading below its IPO debut price from five years ago. This indicates negative growth, suggesting that investors have been unimpressed with the company's performance since going public.Looking at levels, $24.34 is the 52-week high, while $15.62 is the 52-week low.The stock is trading under the 200-day MA at $19, but above the 50-day at $17.80. A break below that 50-day would likely bring about a test of the recent low.In SummaryLevi Strauss faces significant challenges despite its strong brand heritage and global presence. The stock has failed to gain momentum since its IPO, currently trading below its debut price, and recent earnings reports and downward revisions to earnings estimates suggest a lack of investor confidence.LEVI faces headwinds that make it a challenging investment, particularly for those seeking growth or momentum in the near term.Additional content:Is Broadcom a Better Stock than NVIDIA Right Now?The technology space is witnessing an artificial intelligence (AI)-driven surge, with industry leaders NVIDIA and Broadcom at the forefront. However, these two companies operate under vastly different business models. While NVIDIA is deeply dependent on AI chips, Broadcom boasts a diversified portfolio across multiple markets. This raises a critical question for investors: Is Broadcom the wiser investment choice than NVIDIA?NVIDIA: AI-Centric Growth & Potential RisksNVIDIA has seen explosive growth, with the third-quarter fiscal 2025 revenues reaching $35.08 billion, marking a 94% year-over-year increase. The AI revolution primarily fuels this surge, as its Data Center segment alone generated $30.8 billion, accounting for 88% of total revenues and growing 112% year over year. Notably, the demand for H100 and H200 GPUs, which power AI training and inference, continues to skyrocket. Moreover, NVIDIA’s next-generation Blackwell architecture is expected to sustain this momentum, solidifying its leadership in AI infrastructure.However, this aggressive AI-driven expansion comes with significant risks. Since AI chips form the backbone of NVIDIA’s business, any slowdown in AI demand could lead to a sharp revenue decline. While the company is making strides in software and services, hardware remains its dominant revenue source, leaving it vulnerable to fluctuations in AI spending.Market volatility poses another challenge. Supply chain constraints could disrupt production and delay product rollouts, affecting revenue growth. Furthermore, the industry may experience AI spending digestion—a phase where companies scale back investments after an initial surge in AI infrastructure build-out. This could temper demand for NVIDIA’s chips, making its current growth trajectory less predictable.Despite these risks, NVIDIA’s position as the leading AI hardware provider gives it a strong competitive advantage. Continued technological innovation, expansion into enterprise AI software and increasing adoption of AI across industries will be crucial in sustaining its long-term growth.Broadcom: A More Diversified and Stable Business ModelUnlike NVIDIA, Broadcom has a more balanced business portfolio, which provides insulation against market fluctuations. For the fourth quarter of 2024, Broadcom reported $14.05 billion in revenues, up 51.2% year over year. While Broadcom’s AI revenues are growing rapidly — up 220% year over year to $12.2 billion — it only accounts for 41% of the company’s semiconductor revenues, making Broadcom less vulnerable to a potential AI slowdown.One of Broadcom’s biggest strengths is diversification across multiple technology sectors. The company’s networking segment, particularly AI connectivity solutions using Ethernet, is seeing strong growth and is expected to reach a $60 billion to $90 billion market by 2027.Additionally, Broadcom’s acquisition of VMware has transformed it into a major player in enterprise software, adding $5.8 billion to fourth-quarter revenues. This segment provides recurring income and acts as a buffer against hardware market fluctuations. Broadcom also generates revenues from wireless technologies (RF, WiFi, Bluetooth), broadband and server storage, further strengthening its stability.Conclusion: Growth vs. StabilityIn the short term, NVIDIA presents a more attractive growth opportunity due to its dominance in AI hardware. The company’s cutting-edge GPU technology and massive AI infrastructure investments make it a key player in the industry. However, this rapid expansion also means higher risks, especially if AI demand slows or competitors gain market share.On the other hand, Broadcom offers a more balanced and diversified approach. While its AI business is growing, it is not the sole driver of revenues, reducing potential downside risks. Its strong presence in networking, software (via VMware) and wireless solutions ensures long-term financial stability, even if AI spending cools down.For investors, the choice between NVIDIA and Broadcom depends on risk appetite. Those looking for explosive AI-driven growth may favor NVIDIA – carrying a Zacks Rank #2 (Buy) – while those seeking a safer, more diversified semiconductor play may find #2 Ranked Broadcom a more resilient long-term investment. You can see the complete list of today’s Zacks #1 Rank stocks here.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339https://www.zacks.comZacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index.Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NVIDIA Corporation (NVDA): Free Stock Analysis Report Deckers Outdoor Corporation (DECK): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis Report Levi Strauss & Co. (LEVI): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks