Table of Contents
Key Points
- Crocs shares have been weighed down by the underperformance of their HEYDUDE brand.
- Aside from this, though, the fundamentals remain strong, and the longer-term outlook is bullish.
- A P/E ratio of 8 presents an almost unmissable opportunity, and it looks like shares are already starting to turn.
- 5 stocks we like better than Crocs
Crocs, Inc. NASDAQ: CROX is the Colorado headquartered foam clog maker. The stock experienced a 75% sell-off after a massive rally in 2021 and has been on a rollercoaster ride since then. However, despite recent underperformance and a drop in share price, Crocs’ fundamentals remain strong and the longer-term outlook is positive. With a price-to-earnings (P/E) ratio of 8, the stock is considered to be a highly attractive investment opportunity.
Analysts have been upgrading their ratings on Crocs, expressing bullish sentiment. Stifel upgraded the stock to a Buy in July, highlighting the company’s strong longer-term outlook, particularly in Asia. Wedbush followed suit in September, upgrading Crocs to an Outperform rating and emphasizing that the ongoing selling pressure was unjustified due to the underperformance of the HEYDUDE brand, which accounts for less than 25% of overall revenue.
Crocs’ shares have recently found a bottom and have been trading sideways for the past four weeks. The stock’s current low valuation has caught the attention of Wall Street, with Raymond James upgrading the stock to a full Outperform rating and pointing out the attractive P/E ratio compared to the company’s longer-term average. With a target price of $110, analysts believe there is potential for a 30% upside from current levels.
Crocs’ low P/E ratio of 8 stands in stark contrast to other footwear companies such as Foot Locker and Nike, further highlighting the attractive valuation of the stock. The technical setup also looks promising, with the stock’s Relative Strength Index indicating an oversold condition and a significant short interest that could potentially fuel a rally.
While Crocs currently has a “Moderate Buy” rating among analysts, it’s worth considering other top-rated stocks recommended by analysts.
