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Time to Buy Crocs (CROX) Stock After Crushing Q1 Earnings Expectations?
Crocs (CROX - Free Report) stock has highlighted this week’s earnings lineup after crushing Q1 earnings expectations on Tuesday. The footwear and apparel leader has seen its stock soar over +40% this year to impressively outpace the broader indexes and many noteworthy peers such as Guess (GES - Free Report) and Ralph Lauren (RL - Free Report) .
That said, let’s see if it's still worth holding or buying Crocs stock after the company’s impressive Q1 results.
Image Source: Zacks Investment Research
Strong Q1 Results
Crocs brand growth remains compelling as Q1 sales rose 6% year over year to $938.63 million which beat estimates of $883.85 million by 6% as well. Even better was Crocs increased profitability with earnings of $3.02 per share rising 16% from the prior year quarter and crushing EPS estimates of $2.25 by 34%.
More impressive, Crocs has now surpassed top and bottom line expectations for 16 consecutive quarters and has posted an average earnings surprise of 17% in its last four quarterly reports.
Image Source: Zacks Investment Research
Growth & Outlook
According to Zacks estimates, Crocs’ annual earnings are now expected to rise 3% in fiscal 2024 and are projected to expand another 9% in FY25 to $13.56 per share. Total sales are forecasted to expand 4% this year and are expected to rise another 6% in FY25 to $4.37 billion.
Image Source: Zacks Investment Research
Attractive P/E Valuation
Despite the incredible year-to-date rally in Crocs stock, CROX still trades at just 10.9X forward earnings. This is a slight discount to the Zacks Textile-Apparel Industry average of 12.5X and Ralph Lauren’s 14.8X while being just above the P/E valuation of Guess at 9.1X.
Image Source: Zacks Investment Research
Bottom Line
At the moment Crocs stock lands a Zacks Rank #3 (Hold). Given the company’s growth trajectory and valuation remains attractive, holding CROX may continue to pay off although there could be better buying opportunities after such a blazing start to the year.