Head-To-Head Analysis: Deckers Outdoor (NYSE:DECK) and Citi Trends (NASDAQ:CTRN)

Citi Trends (NASDAQ:CTRN) and Deckers Outdoor (NYSE:DECK) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Institutional and Insider Ownership

97.8% of Deckers Outdoor shares are held by institutional investors. 3.8% of Citi Trends shares are held by insiders. Comparatively, 0.4% of Deckers Outdoor shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for Citi Trends and Deckers Outdoor, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Citi Trends	1	0	2	0	2.33
Deckers Outdoor	3	12	9	2	2.38

Citi Trends presently has a consensus target price of $39.50, suggesting a potential downside of 17.50%. Deckers Outdoor has a consensus target price of $116.79, suggesting a potential upside of 14.76%. Given Deckers Outdoor’s stronger consensus rating and higher probable upside, analysts plainly believe Deckers Outdoor is more favorable than Citi Trends.

Earnings & Valuation

This table compares Citi Trends and Deckers Outdoor”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Citi Trends	$753.08 million	0.53	-$43.17 million	($2.00)	-23.94
Deckers Outdoor	$4.99 billion	2.97	$966.09 million	$6.75	15.08

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Citi Trends	-2.05%	-22.84%	-5.55%
Deckers Outdoor	19.47%	40.54%	26.95%

Risk and Volatility

Citi Trends has a beta of 2.08, suggesting that its stock price is 108% more volatile than the S&P 500. Comparatively, Deckers Outdoor has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500.

Summary

Deckers Outdoor beats Citi Trends on 13 of the 15 factors compared between the two stocks.

About Citi Trends

Citi Trends, Inc. operates as a value retailer of fashion apparel, accessories, and home goods. The company offers apparel, such as fashion sportswear and footwear for men and ladies, as well as apparel for kids, including newborns, infants, toddlers, boys, and girls; sleepwear, lingerie, and scrubs for ladies; and kids uniforms and accessories. It also provides accessories and beauty products that include handbags, luggage, hats, belts, sunglasses, jewelry, and watches, as well as offers outerwear for men and women. In addition, the company offers home and lifestyle products comprising home products for the bedroom, bathroom, kitchen, and decorative accessories; and food, tech, team sports, health and products, as well as seasonal items, books, and toys. Citi Trends, Inc. provides its products primarily to African American and multicultural families in the United States. The company was formerly known as Allied Fashion, Inc. and changed its name to Citi Trends, Inc. in 2001. Citi Trends, Inc. was founded in 1946 and is headquartered in Savannah, Georgia.

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.