Deckers Outdoor Corporation just saw its stock soar 11% on the back of what can only be described as the footwear equivalent of a dad joke: the Hoka shoe. 

You know, the chunky, orthopedic kicks that look like they were designed by a committee of well-meaning but fashion-challenged grandpas (yes, my father-in-law has been rocking these shoes for years). And apparently he’s not alone, America can’t get enough of these “ugly but comfy” sneakers, and it’s turning the company’s profits into a real Cinderella story (minus the glass slipper and the fairy godmother).

You can even find Adam Sandler (the king of comfort), roaming the streets in his signature baggy basketball shorts and oversized T-shirts, like he’s just stepped out for the morning paper—except, it’s every day. And lately, he’s been rocking Hokas, embracing the ultimate “dad-on-a-mission” vibe. 

If we’re talking numbers, Hoka isn’t just a cute little trend—it’s a cash cow in orthopedic disguise. Sales for Hoka soared 34%, pulling in $571 million last quarter (yes, for sneakers that your dad might have picked out). Deckers’ total revenue jumped by 20%, and earnings per share shot up 39%. While Nike’s been flailing, with its stock down 27% this year, Deckers is hoarding a $1.23 billion cash pile without a shred of long-term debt (that’s right, not a penny owed, just like Grandpa’s approach to credit cards.

And then there’s CEO Stefano Caroti, who might as well be wearing a cape at this point. He declared, “Hoka and UGG produced outstanding second-quarter results driven by strong consumer demand for our innovative and unique products.” Translation: “These clunky shoes are making us richer than our wildest dreams.”

But here’s the million-dollar question: is Deckers now too pricey for the Hoka hype?

With Deckers’ stock up a colossal 104% over the last year, some analysts are wondering if it’s getting a bit bubbly. Currently, Deckers trades at a price-to-earnings ratio of around 26, slightly above the average for the apparel sector, which hovers near 23. This elevated valuation signals that investors are betting big on future growth—a lot of it pinned on Hoka’s continued success.



The footwear market is notoriously competitive, with major players like Nike and Adidas vying for every sale. Hoka may be winning the “comfort-chic” race now, but one style misstep or a turn in consumer tastes could quickly change things. Plus, while Hoka’s current growth rate is impressive, sustaining 34% sales increases isn’t exactly guaranteed long-term. If demand for these “cloud shoes” tapers off, Deckers could face some painful pullbacks.

So, is Deckers overvalued? With a P/E above its industry average and a high bar for sustained growth, I wouldn’t touch it with a ten foot pole. But if you believe Hoka can keep the momentum going (or if you just really like chunky sneakers), it might still be worth dressing your investment account like a grandpa.



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Stock.News has positions in Deckers and Nike mentioned in article.