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Crocs Gains on Brand Strength & Other Efforts: Apt to Stay Invested?

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Crocs, Inc. (CROX - Free Report) stock seems in a good spot since the past year, with shares rising more than 60%, comfortably outperforming the broader Consumer Discretionary sector’s return of 18.5% and the Zacks Textile - Apparel industry’s growth of 4.8% in the same period. CROX’s shares have also surpassed the S&P 500 index’s appreciation of 34.3% in a year.

Currently priced at $136.54, CROX stock is trading at 17.4% to its 52-week high of $165.32, reached on June 20, 2024. However, it is trading at an 84.5% premium to its 52-week low mark.

CROX’s Strategies Aid the Rally

The company has been gaining from solid consumer demand across its Crocs and HEYDUDE brands, backed by effective pricing actions. Strength in clogs, sandals and personalization is acting as a tailwind. CROX has built various successful franchises, focused on expanding new usage occasions to boost new and repeat purchases. The sandal category further strengthened as consumers gave positive feedback to its innovation.

Management continues to view personalization as a mega consumer trend, with the opportunity of expanding the Jibbitz penetration in 2024 via higher penetration within digital and wholesale channels, continuous product freshness innovation and advancement in market capabilities. The company has been evolving its partnership model to boost engagement and consumer love.

CROX's Price Performance

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Crocs aims at solidifying the business in North America and developing Wendy and Wally as iconic franchises. The company brought new HEYDUDE partnerships to the market, which include Corona, a four-piece collection with the iconic beverage band, featuring Wally, Wendy and Hudson Styles. Its Lee partnership, Denim and Dudes, highlighted the first HEYDUDE collaboration with international reach.

Crocs is on track with its long-term strategy and key initiatives to deliver sustainable growth. Its growth strategy is focused on three key initiatives. The first key initiative is igniting icons to enhance brand awareness and relevance. The second is investing strategically in Tier 1 markets to drive market share gains via talent, marketing, digital and retail. The third initiative is diversifying the product range to attract new consumers.

Earnings Estimate Revisions Favor Crocs

The aforesaid catalysts have prompted analysts to remain optimistic about CROX. The Zacks Consensus Estimate for 2024 and 2025 earnings has been northbound. In the past 30 days, the consensus estimate for earnings per share (EPS) has been revised 0.3% to $12.88 for 2024 and 0.2% to $14.00 for 2025.

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Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Unlocking CROX Stock’s Valuation

Crocs stock is trading at an attractive valuation relative to the industry. Going by the price/earnings ratio, CROX  is currently trading at 9.91 on a forward 12-month basis, lower than 12.68 of the industry. Also, the stock is trading lower than the S&P 500 index’s 21.69.

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Final Words on CROX

CROX stock is performing well on the bourses given its solid strategic efforts including strength in its brands. Solid upward revisions in earnings estimates and attractive valuation for the stock seem encouraging as well.

To wrap up, Crocs seems to be an attractive investment bet given all the aforementioned positives. The company currently sports a Zacks Rank #1 (Strong Buy).

Other Solid Picks

We have highlighted three other top-ranked stocks, namely, G-III Apparel Group (GIII - Free Report) , Royal Caribbean (RCL - Free Report) and lululemon athletica (LULU - Free Report) .

G-III Apparel is a manufacturer, designer and distributor of apparel and accessories under licensed brands, owned brands and private label brands. It sports a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here

GIII Apparel has a trailing four-quarter earnings surprise of 118.2%, on average. The Zacks Consensus Estimate for GIII Apparel’s current financial-year sales indicates growth of 3.3% from the year-ago figure.

Royal Caribbean carries a Zacks Rank #2 (Buy) at present. RCL has a trailing four-quarter earnings surprise of 18.5%, on average.

The Zacks Consensus Estimate for RCL’s 2024 sales and EPS indicates an increase of 18.2% and 70.9%, respectively, from the year-ago levels.

lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS indicates growth of 9.2% and 9.8%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 7.9%, on average.


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