We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Crocs Stock Rises 50% Year to Date: What's Next for Investors?
Read MoreHide Full Article
Crocs, Inc. (CROX - Free Report) has displayed an impressive performance so far this year, with its shares appreciating 50% year to date. This growth is notable against the industry’s decline of 22.9%. Additionally, the stock fared better than the broader S&P 500 index, which recorded gains of 17.8%. The bullishness in the stock is fueled by high consumer interest in the brand, successful pricing strategies and lower shipping expenses.
Closing at $140.07 on Aug. 26, the stock trades close to its 52-week high mark of $165.32 reached on June 20. The current price also reflects a 15.3% discount from the 52-week high mark, indicating that the stock has further upside potential from here. Moreover, the stock’s current level reflects a premium of 89% from its 52-week low.
The technical indicators show that the stock is trading above both its 50- and 200-day moving averages, indicating strong upward momentum and suggesting sustained investor confidence in the company's performance.
The question arises here whether it is prudent to buy CROX’s shares after the recent rally. Let’s take a look at the Crocs’ underlying fundamentals.
Image Source: Zacks Investment Research
Uncovering the Opportunities for CROX
This Zacks Rank #3 (Hold) company has been benefiting from strong consumer demand across its Crocs and HEYDUDE brands, bolstered by effective pricing strategies. The company has seen robust performances in clogs, sandals and personalization, with second-quarter 2024 growth driven by the Classic Clog.
Crocs is making significant strides in its long-term strategy and key initiatives aimed at delivering sustainable growth. The company's growth strategy revolves around three main initiatives: igniting iconic products across both brands to boost customer awareness and relevance; strategically investing in Tier 1 markets to increase market share through enhanced talent, marketing, digital efforts and retail expansion; and diversifying its product range to attract a broader consumer base.
CROX has achieved notable growth in brand awareness and desirability through strategic collaborations with well-known names like Toy Story and Hello Kitty, as well as emerging brands like Klott. The partnership with luxury brand Simone Rocha further strengthens its position in the high-end market. The launch of Echo Storm through direct-to-consumer channels and partnerships with Foot Locker and JD Sports has shown promising results.
Looking ahead, the company aims to exceed $5 billion in revenues by 2026, witnessing a five-year compound annual growth rate of more than 17%. This target is expected to be achieved through robust digital sales, increased market share for sandals, growth in Asia and innovations in product and marketing. Management anticipates a fourfold increase in revenues from sandals by 2026.
Understanding the Roadblocks for CROX
Crocs has been grappling with rising costs stemming from the HEYDUDE acquisition, and distribution and logistics inefficiencies, leading to higher selling, general and administrative (SG&A) expenses. In the second quarter, SG&A expenses rose 19.4%, driven by continued investments in talent, marketing and direct-to-consumer initiatives to enhance market share.
The company’s wholesale business for HEYDUDE is facing challenges, and management expects these difficulties to persist through the second half of 2024. The company has expressed caution regarding consumer spending trends, the geopolitical environment and the timing of SG&A investments.
CROX’s Undervalued Valuation
With the stock steadily ticking up, the company is currently trading at a forward 12-month P/E multiple of 10.30X, below the industry average of 12.36X and the S&P 500’s average of 21.72X. Currently, CROX’s stock is undervalued relative to its peers.
A lower P/E ratio is usually an attractive opportunity for investors looking to accumulate shares, especially if they believe the company's future earnings will exceed current market expectations.
Wolverine World Wide designs, manufactures and distributes of a wide variety of casual and active apparel and footwear. The company sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for WWW’s current financial-year sales indicates a decline of almost 23% from the year-ago reported figures. The consensus mark for EPS reflects significant growth to 85 cents from 5 cents reported in the prior year. WWW has a trailing four-quarter earnings surprise of 7.5%, on average.
Kontoor Brands is a lifestyle apparel company that designs, produces, distributes and licenses denim, apparel, footwear and accessories under the Wrangler and Lee brands. The stock currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for KTB’s 2024 earnings and sales indicates growth of 12.7% and 0.1%, respectively, from the 2023 reported figures. KTB has a trailing four-quarter earnings surprise of 12.3%, on average.
Funko, a pop culture consumer products company, carries a Zacks Rank #2. FNKO has a trailing four-quarter earnings surprise of 87.6%, on average.
The Zacks Consensus Estimate for Funko’s current financial-year sales indicates a decline of 1.7% from the year-ago reported figures. The consensus mark for earnings is pegged at break-even results compared with a loss of 87 cents reported in the prior year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Crocs Stock Rises 50% Year to Date: What's Next for Investors?
Crocs, Inc. (CROX - Free Report) has displayed an impressive performance so far this year, with its shares appreciating 50% year to date. This growth is notable against the industry’s decline of 22.9%. Additionally, the stock fared better than the broader S&P 500 index, which recorded gains of 17.8%. The bullishness in the stock is fueled by high consumer interest in the brand, successful pricing strategies and lower shipping expenses.
Closing at $140.07 on Aug. 26, the stock trades close to its 52-week high mark of $165.32 reached on June 20. The current price also reflects a 15.3% discount from the 52-week high mark, indicating that the stock has further upside potential from here. Moreover, the stock’s current level reflects a premium of 89% from its 52-week low.
The technical indicators show that the stock is trading above both its 50- and 200-day moving averages, indicating strong upward momentum and suggesting sustained investor confidence in the company's performance.
The question arises here whether it is prudent to buy CROX’s shares after the recent rally. Let’s take a look at the Crocs’ underlying fundamentals.
Image Source: Zacks Investment Research
Uncovering the Opportunities for CROX
This Zacks Rank #3 (Hold) company has been benefiting from strong consumer demand across its Crocs and HEYDUDE brands, bolstered by effective pricing strategies. The company has seen robust performances in clogs, sandals and personalization, with second-quarter 2024 growth driven by the Classic Clog.
Crocs is making significant strides in its long-term strategy and key initiatives aimed at delivering sustainable growth. The company's growth strategy revolves around three main initiatives: igniting iconic products across both brands to boost customer awareness and relevance; strategically investing in Tier 1 markets to increase market share through enhanced talent, marketing, digital efforts and retail expansion; and diversifying its product range to attract a broader consumer base.
CROX has achieved notable growth in brand awareness and desirability through strategic collaborations with well-known names like Toy Story and Hello Kitty, as well as emerging brands like Klott. The partnership with luxury brand Simone Rocha further strengthens its position in the high-end market. The launch of Echo Storm through direct-to-consumer channels and partnerships with Foot Locker and JD Sports has shown promising results.
Looking ahead, the company aims to exceed $5 billion in revenues by 2026, witnessing a five-year compound annual growth rate of more than 17%. This target is expected to be achieved through robust digital sales, increased market share for sandals, growth in Asia and innovations in product and marketing. Management anticipates a fourfold increase in revenues from sandals by 2026.
Understanding the Roadblocks for CROX
Crocs has been grappling with rising costs stemming from the HEYDUDE acquisition, and distribution and logistics inefficiencies, leading to higher selling, general and administrative (SG&A) expenses. In the second quarter, SG&A expenses rose 19.4%, driven by continued investments in talent, marketing and direct-to-consumer initiatives to enhance market share.
The company’s wholesale business for HEYDUDE is facing challenges, and management expects these difficulties to persist through the second half of 2024. The company has expressed caution regarding consumer spending trends, the geopolitical environment and the timing of SG&A investments.
CROX’s Undervalued Valuation
With the stock steadily ticking up, the company is currently trading at a forward 12-month P/E multiple of 10.30X, below the industry average of 12.36X and the S&P 500’s average of 21.72X. Currently, CROX’s stock is undervalued relative to its peers.
A lower P/E ratio is usually an attractive opportunity for investors looking to accumulate shares, especially if they believe the company's future earnings will exceed current market expectations.
3 CROX Peers Showing Potential
Some better-ranked stocks are Wolverine World Wide (WWW - Free Report) , Kontoor Brands Inc. (KTB - Free Report) and Funko, Inc. (FNKO - Free Report) .
Wolverine World Wide designs, manufactures and distributes of a wide variety of casual and active apparel and footwear. The company sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for WWW’s current financial-year sales indicates a decline of almost 23% from the year-ago reported figures. The consensus mark for EPS reflects significant growth to 85 cents from 5 cents reported in the prior year. WWW has a trailing four-quarter earnings surprise of 7.5%, on average.
Kontoor Brands is a lifestyle apparel company that designs, produces, distributes and licenses denim, apparel, footwear and accessories under the Wrangler and Lee brands. The stock currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for KTB’s 2024 earnings and sales indicates growth of 12.7% and 0.1%, respectively, from the 2023 reported figures. KTB has a trailing four-quarter earnings surprise of 12.3%, on average.
Funko, a pop culture consumer products company, carries a Zacks Rank #2. FNKO has a trailing four-quarter earnings surprise of 87.6%, on average.
The Zacks Consensus Estimate for Funko’s current financial-year sales indicates a decline of 1.7% from the year-ago reported figures. The consensus mark for earnings is pegged at break-even results compared with a loss of 87 cents reported in the prior year.