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On Thursday, Needham analysts adjusted their outlook on Crocs stock (NASDAQ:CROX), raising the price target to $129 from $118 while reiterating a Buy rating. The revision follows Crocs’ release of first-quarter earnings that exceeded expectations, showcasing robust performance and positive developments regarding tariffs. According to InvestingPro analysis, Crocs currently trades at an attractive P/E ratio of 6.77x and maintains a "GREAT" overall financial health score of 3.54, suggesting the stock may be undervalued relative to its fundamentals.
Crocs reported a revenue growth of +1% on a constant-FX basis for the quarter, surpassing the company’s own forecast of a -1.5% decline. Earnings per share (EPS) also outperformed, coming in at $3.00 compared to the anticipated range of $2.38 to $2.52. The company’s impressive gross margin of 58.76% reflects strong operational efficiency, while its robust free cash flow yield of 15% demonstrates excellent cash generation capabilities.
In light of these results, Needham has increased their EPS estimates for fiscal years 2025 and 2026 to $12.74 and $12.92, respectively, up from previous estimates of $11.41 and $11.81. This optimistic revision is underpinned by the belief that the stock presents a highly attractive risk/reward profile, trading at approximately 8.5 times the projected FY25 EPS.
Despite the positive first-quarter performance, Crocs has opted for a cautious approach regarding future guidance. Due to the uncertainties surrounding tariffs, the company did not provide specific guidance for the second quarter and has withdrawn its full-year 2025 guidance. This conservative stance reflects the broader challenges faced by many companies in navigating the current global trade environment.
In other recent news, Crocs Inc. reported impressive results for the first quarter of 2025, with earnings and revenues surpassing forecasts. The company achieved earnings per share of $3.00, significantly exceeding analysts’ expectations of $2.48, and generated revenue of $937 million, which was above the projected $907.11 million. This strong performance was attributed to growth in the Crocs brand and effective cost management. Despite the positive earnings, Crocs has withdrawn its full-year guidance due to uncertainties related to potential tariffs, which could impact costs. The company has taken measures to mitigate these risks, including sourcing adjustments and selective price increases. Additionally, Crocs repurchased 607,000 shares for $61 million, demonstrating confidence in its future growth. Analysts have noted the company’s strategic focus on innovation and international market expansion as key drivers of its robust performance. The firm’s international revenue increased by 12%, with notable growth in China and Western Europe.
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