Deckers Outdoor (NYSE:DECK) vs. Children’s Place (NASDAQ:PLCE) Financial Review

Deckers Outdoor (NYSE:DECK) and Children’s Place (NASDAQ:PLCE) are both retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Deckers Outdoor	19.42%	40.49%	26.95%
Children’s Place	-2.04%	-10.32%	-2.45%

Volatility and Risk

Deckers Outdoor has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500. Comparatively, Children’s Place has a beta of 2.02, indicating that its share price is 102% more volatile than the S&P 500.

Valuation and Earnings

This table compares Deckers Outdoor and Children’s Place”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Deckers Outdoor	$4.99 billion	3.37	$966.09 million	$6.52	17.37
Children’s Place	$1.39 billion	0.11	-$57.82 million	($0.86)	-7.96

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

Analyst Recommendations

This is a summary of current ratings and price targets for Deckers Outdoor and Children’s Place, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Deckers Outdoor	2	13	9	1	2.36
Children’s Place	0	1	0	0	2.00

Deckers Outdoor currently has a consensus price target of $135.89, suggesting a potential upside of 20.03%. Children’s Place has a consensus price target of $7.00, suggesting a potential upside of 2.20%. Given Deckers Outdoor’s stronger consensus rating and higher probable upside, equities analysts clearly believe Deckers Outdoor is more favorable than Children’s Place.

Institutional & Insider Ownership

97.8% of Deckers Outdoor shares are owned by institutional investors. 0.4% of Deckers Outdoor shares are owned by insiders. Comparatively, 0.6% of Children’s Place shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Deckers Outdoor beats Children’s Place on 13 of the 15 factors compared between the two stocks.

About Deckers Outdoor

Deckers Outdoor Corporation, together with its subsidiaries, designs, markets, and distributes footwear, apparel, and accessories for casual lifestyle use and high-performance activities in the United States and internationally. The company offers premium footwear, apparel, and accessories under the UGG brand name; footwear, apparel, and accessories for ultra-runners and athletes under the HOKA brand name; and sandals, shoes, and boots under the Teva brand name. It also provides relaxed casual shoes and sandals under the Sanuk brand name; casual footwear fashion line under the Koolaburra brand name; and footwear under the AHNU brand name. The company sells its products through domestic and international retailers; international distributors; and directly to its consumers through its direct-to-consumer business, which includes e-commerce websites and retail stores. Deckers Outdoor Corporation was founded in 1973 and is headquartered in Goleta, California.

About Children’s Place

The Children’s Place, Inc. engages in the provision of apparel, footwear, accessories, and other items for children. The firm also designs contracts to manufacture and sell fashionable and value-priced merchandise under the brand names of The Children’s Place, Baby Place, and Gymboree. It operates through The Children’s Place U.S. and The Children’s Place International segments. The Children’s Place U.S. segment refers to the company’s U.S. and Puerto Rico-based stores and revenue from its U.S. based wholesale business. The Children’s Place International segment is involved in the Canadian-based stores, revenue from the company’s Canadian-based wholesale business, as well as revenue from international franchisees. The company was founded by David Pulver and Clinton A. Clark in 1969 and is headquartered in Secaucus, NJ.