Deckers (DECK) vs Crocs (CROX): Which is a Better Stock to Buy?

Deckers Outdoor Corporation (NYSE:DECK) owns Hoka and Ugg. Crocs, Inc. (NASDAQ:CROX) owns the clog and HeyDude.

Both sell footwear that started as a niche and became ordinary. Both trade near eleven times their past year’s earnings. What separates them is the year they have just had. Deckers is down about a quarter. Crocs is up more than half.

READ ALSO: On Holding (ONON) Outlines Ambitious Goals and $1B Buyback, Jumps 7.6%

Deckers Has the Better Balance Sheet and the Worse Year:

Start with what Deckers owns outright. The company holds about $1.6 billion in cash and a debt load well below that, which leaves it with more money than it owes.

That is a rare position in consumer goods, and it matters more now than it did two years ago. Borrowing is expensive by the standards of the past twenty years. Crocs pays for that on $1.69 billion of debt. Deckers pays for it on nothing.

Growth favors Deckers too, though neither is racing. Revenue rose about 5.7% in the most recent quarter against 2.6% at Crocs, and on a bigger revenue base.

The brands explain the difference. Hoka turned running shoes into a category Deckers did not previously compete in, and Ugg has kept selling long after the boot was written off as a passing trend. Two brands growing is a safer arrangement than one brand carrying everything.

DON’T MISS: Nike (NKE): Wall Street Tests Whether the Turnaround Can Outrun Weak Demand Ahead of Q1 Results

Crocs Earns More on Every Sale and Costs Less to Own:

The case for Crocs starts at the factory. Its operating margin runs near 24%, comfortably ahead of Deckers, because a clog made of foam costs very little to produce.

That advantage does not survive the trip down the income statement. Crocs turns 14.6% of revenue into profit while Deckers turns 18.4%. The difference is largely interest on the debt described below.

Crocs is also the cheaper share. It trades near eight times what analysts expect it to earn next year, while Deckers trades near eleven, despite the two being almost identical on past year earnings.

That gap carries a second message. A multiple falling from eleven to eight means analysts expect Crocs to grow earnings sharply, while Deckers is forecast to grow its own barely at all. Backing Deckers means betting those forecasts are wrong.

The debt is where the argument turns. Crocs carries about $1.69 billion of debt against a cash balance a fraction of that size, most of it taken on to buy HeyDude. That acquisition has not worked as intended, and servicing the borrowing that paid for it gets more expensive every time the bond market reprices.

Concentration is the other worry. Strip out HeyDude and Crocs is essentially one product. Deckers has two brands that are both working.

Deckers is not without its own problem, and the share price says so. What the market has marked down is the pace of Hoka, which grew fast enough for long enough that merely growing is now read as a disappointment. If that brand settles into ordinary numbers, the case here goes with it.

Conclusion:

Crocs makes more on each pair before financing costs, it is growing, and at eight times forward earnings it is genuinely cheap after a 51% run. However, it depends heavily on a single product, carries heavy debt from an acquisition that has disappointed, and it grew revenue 2.6% last quarter against 5.7% at Deckers. Deckers grows roughly twice as fast, owns two brands rather than one, and holds more cash than debt at a moment when that is worth paying for.

On balance, Deckers is the better buy, though not because it is cheaper. On next year’s earnings, it is the more expensive of the two. The case is the drawdown itself. It has left a business with more cash than debt, faster revenue growth, and a wider net margin priced on the same past-year multiple as a leveraged rival. The number to watch is Hoka revenue growth, since that is the brand carrying the case.

Market Sentiment:

Deckers Outdoor Corporation was held by 59 hedge funds with a combined stake value of about $1.2 billion at the end of Q2 2026 in the Insider Monkey database, down from 62 holders in the previous quarter. Crocs, Inc. was held by 47 hedge funds with a combined stake value of about $1.1 billion, up from 44 holders in the previous quarter.

READ NEXT: Visa (V) vs American Express (AXP): Which is a Better Stock to Buy and Twilio (TWLO) Keeps Climbing as Investors Rediscover its AI Business

This article is originally published at Insider Monkey.