Analyzing Crocs (CROX) & Deckers Outdoor Corporation (NYSE:DECK)

Crocs (NASDAQ: CROX) and Deckers Outdoor Corporation (NYSE:DECK) are both consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, risk, valuation, profitability, dividends, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares Crocs and Deckers Outdoor Corporation’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Crocs	$1.01 billion	0.67	$41.19 million	($0.39)	-24.10
Deckers Outdoor Corporation	$1.83 billion	1.14	$226.21 million	$0.67	96.90

Deckers Outdoor Corporation has higher revenue and earnings than Crocs. Crocs is trading at a lower price-to-earnings ratio than Deckers Outdoor Corporation, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Crocs and Deckers Outdoor Corporation, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Crocs	0	4	1	0	2.20
Deckers Outdoor Corporation	0	10	5	0	2.33

Crocs presently has a consensus price target of $8.25, suggesting a potential downside of 12.23%. Deckers Outdoor Corporation has a consensus price target of $66.31, suggesting a potential upside of 2.14%. Given Deckers Outdoor Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Deckers Outdoor Corporation is more favorable than Crocs.

Insider & Institutional Ownership

90.3% of Crocs shares are owned by institutional investors. 1.0% of Crocs shares are owned by company insiders. Comparatively, 1.9% of Deckers Outdoor Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Crocs and Deckers Outdoor Corporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Crocs	-0.91%	-3.36%	-1.35%
Deckers Outdoor Corporation	1.23%	14.25%	10.01%

Risk & Volatility

Crocs has a beta of 0.55, suggesting that its stock price is 45% less volatile than the S&P 500. Comparatively, Deckers Outdoor Corporation has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500.

Summary

Deckers Outdoor Corporation beats Crocs on 12 of the 13 factors compared between the two stocks.

Crocs Company Profile

Crocs, Inc. is engaged in the design, development, manufacturing, marketing, distribution and sale of casual lifestyle footwear and accessories for men, women, and children. The Company’s segments include Americas, Asia Pacific and Europe. Its products include footwear and accessories that utilize its closed-cell resin, called Croslite, as well as casual lifestyle footwear that use a range of materials. Its Croslite material enables the Company to produce non-marking, and odor-resistant footwear. As of December 31, 2016, the Company sold its products in over 90 countries through domestic and international retailers and distributors, and directly to consumers through its company-operated retail stores, outlets, e-commerce store sites and kiosks. The Company’s sales channels include wholesale, which includes distributors, Crocs owned retail and Crocs e-commerce.

Deckers Outdoor Corporation Company Profile

Deckers Outdoor Corporation is engaged in designing, marketing and distributing footwear, apparel and accessories for both everyday casual lifestyle use and high performance activities. The Company’s segments include operations of its brands, such as UGG, Teva, Sanuk and other brands; wholesale divisions, and Direct-to-Consumer (DTC) business, which includes E-Commerce business and retail store business. The Company sells accessories, such as handbags and loungewear, through domestic and international retailers, international distributors and directly to end user consumers both domestically and internationally, through its Websites, call centers and retail stores. The Company markets its products primarily under three brands: UGG, Teva and Sanuk. The Company’s other brands include Hoka One One (Hoka), Ahnu and Koolaburra by UGG (Koolaburra). It has a total of over 150 retail stores across the world.