Who's going to carry the logs
Swing Trader
Deckers Outdoor is a decent safety play as a very profitable business trading at a low multiple, now with a buyback authorization of up to 33% of its market cap. Growth was somewhat slower than expected and guidance is mediocre, but a return to growth could make the stock jump. x.comÂ
Crocs is cheap enough to be a takeover target for Deckers or private equity: 2026 EPS guidance of $13.20-13.75 puts it at about 7.3x adjusted earnings, and it bought back 10% of shares over the past year. It beat and raised, with the Crocs brand down 1% and HeyDude down 13% in a reset. Skechers was bought out last year at 8.6x EBITDA, equal to $144 for Crocs. A 30-40% premium could suffice since management lost credibility after overpaying for HeyDude. x.com x.com x.comÂ
Deckers looks like a value trap, as fashion cyclicality has destroyed many value investors. Revenue is decelerating quickly, EBIT margins are double those of a decade ago, and there has not been a single insider purchase during its 63% drawdown. x.comÂ
On Holding is the better business to own: when you can pay a few more turns of valuation for higher growth, don't think twice. Deckers, which Michael Burry killed, is the contrast. x.comÂ
On Holding could rerate quickly from 9 times forward EBITDA back to 20 times if its growth decline slows or reverses, possibly in early 2027, while it holds premium gross margins. Over the past two quarters it deliberately held prices and protected its premium positioning, pulling back from wholesale toward direct-to-consumer. Its apparel business is growing 84%, small now but a clear sign its category expansion is working. x.comÂ
Deckers' lowered FY27 revenue guidance adds evidence of slowing growth behind the value-trap concern. Guidance is now $5.70B-$5.725B, down from $5.86B-$5.91B and below the $5.88B estimate; the stock trades at about 10 times next-twelve-month earnings. x.comÂ
Deckers looks exposed to sector-wide discounting, as a struggling Nike is about to drag down the whole footwear sector with promotions. The lowest Street price target on Deckers was cut to $70, a bad sign, since an analyst is unlikely to turn bearish without good information. x.com x.comÂ