Procore signs multi-year strategic collaboration agreement with AWS
Monday, Guggenheim maintained a Buy rating on Crocs shares (NASDAQ:CROX) but lowered the price target to $150 from $155. Currently trading at $102.07, the stock shows compelling value metrics with a P/E ratio of just 7.3x. According to InvestingPro analysis, Crocs appears undervalued at current levels, with analyst targets ranging from $100 to $180. The firm’s analyst cited a strong global brand presence for Crocs, Inc. and continued belief in the value of the company, despite acknowledging the uncertainties surrounding the HEYDUDE brand’s turnaround. The optimism is based on the expected traction of ongoing investments and repositioning efforts for HEYDUDE in the second half of 2025.
The earnings report for Crocs is scheduled for February 13, with Guggenheim holding steady on its fourth quarter 2024 and full-year 2024 earnings per share (EPS) estimates, aligning with the consensus. The company maintains strong fundamentals, with a gross profit margin of 58.15% and an impressive return on equity of 57%. InvestingPro data reveals the company’s overall financial health score is "GREAT," supported by robust profitability metrics. However, the firm has revised its 2025 operating margin and EPS expectations down to 24.2% and $12.50, respectively, from the previous 24.9% operating margin and $12.90 EPS forecast. This adjustment stems from a detailed review of selling, general, and administrative (SG&A) spending trends, and investments in marketing and talent, particularly for the HEYDUDE brand, which began in the second half of 2024.
Guggenheim has also lowered its first quarter 2025 EPS estimate for Crocs to $2.55 from $2.80, below the consensus of $2.71. This is due to an anticipated $20 million increase in SG&A expenses. The reduction in the price target to $150 reflects these revised estimates. Despite these changes, Guggenheim still sees Crocs as an attractive investment opportunity, with an 8.2 times multiple on the firm’s 2025 EPS estimate and a favorable risk-reward ratio for the company’s shares.
The analyst highlighted three key catalysts that could drive Crocs’ shares: continued growth in North America estimated at 3% for 2025, a growth inflection point for HEYDUDE in the second half of 2025, and the potential for significant free cash flow generation, which could lead to a highly accretive share repurchase opportunity, although this is not included in the firm’s estimates. InvestingPro identifies several additional bullish factors, including management’s aggressive share buyback program and the company’s strong return over the last decade. Subscribers can access 8 more exclusive ProTips and a comprehensive research report that provides deep insights into Crocs’ investment potential.
In other recent news, Crocs Inc. experienced a series of analyst rating adjustments and revised financial projections. Williams Trading downgraded Crocs’ stock rating from Buy to Hold and lowered the price target to $112. The firm also revised its revenue and EPS estimates for Crocs downward for the fourth quarter of 2024 and full fiscal years 2024, 2025, and 2026 due to weakening trends for the Crocs and HEYDUDE brands. Meanwhile, Piper Sandler maintained an Overweight rating on Crocs, citing the company as the most undervalued stock they cover. BofA Securities reduced its first quarter EPS estimate for Crocs by $0.23 to $2.57 due to increased Selling, General & Administrative expenses and updated foreign exchange rates. However, they retained a Buy rating and expect Crocs’ margins to begin improving in the second quarter and more significantly in the second half of the year. These are among the recent developments for Crocs Inc.
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