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Investing.com - KeyBanc Capital Markets reduced its price target on Crocs (NASDAQ:CROX) to $95.00 from $120.00 on Friday, while maintaining an Overweight rating on the footwear company’s stock. According to InvestingPro data, the stock appears undervalued based on its Fair Value analysis, with impressive gross profit margins of 59.25%.
The price target reduction follows Crocs’ recent quarterly earnings report, which KeyBanc described as "decent" despite triggering a significant 29% drop in the company’s share price, compared to a 0.1% decline in the S&P 500 during the same period.
According to KeyBanc, the sharp stock decline stemmed from Crocs’ weaker-than-expected outlook for the second half of the year, which cited several headwinds including reduced inventory receipts, further resets in the HEYDUDE brand, pressure related to tariffs, and reduced Crocs discounting amid softening consumer sentiment.
Despite these near-term challenges, KeyBanc expressed confidence that Crocs is "taking the appropriate steps to protect brand health and reset the foundation for growth," leading the firm to maintain its Overweight rating despite lowering its price target based on reduced estimates.
The investment bank indicated it continues to favor Crocs’ medium-term and long-term opportunities, suggesting that investor "patience will be rewarded" with the footwear maker’s stock.
In other recent news, Crocs reported better-than-expected financial results for the second quarter of 2025. The company achieved an adjusted diluted earnings per share of $4.23, surpassing the forecasted $4.02, and revenue reached $1.15 billion, slightly above the expected $1.14 billion. Despite these positive results, Crocs issued guidance that fell short of consensus expectations, leading to several analyst actions. BofA Securities lowered its price target for Crocs to $99, while maintaining a Buy rating, citing disappointing third-quarter guidance. Williams Trading downgraded Crocs from Buy to Hold and reduced its price target to $80, attributing the change to a weak consumer outlook. Barclays (LON:BARC) also downgraded the stock from Overweight to Equalweight, setting a new price target of $81 amid macroeconomic uncertainties and challenges with the HEYDUDE brand. These developments reflect ongoing concerns about Crocs’ future performance despite its strong second-quarter earnings.
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