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Investing.com - Needham has lowered its price target on Crocs (NASDAQ:CROX) to $89.00 from $129.00 while maintaining a Buy rating on the stock. According to InvestingPro data, the stock appears undervalued at its current price of $78.14, trading at a modest P/E ratio of 4.79.
The price target reduction follows Crocs’ guidance for the third quarter, which projects revenues to decline by 9%-11% compared to consensus expectations of flat performance.
Crocs delivered solid first-half results with revenues 3% in line with consensus at +3% growth and earnings per share of $4.23, exceeding the Street’s expectation of $4.00.
The footwear company also indicated that operating profit margins would erode by 650-750 basis points in the third quarter, significantly worse than analysts’ forecast of a 180 basis point decline, and warned that pressure would persist "for several quarters."
Needham reduced its fiscal year 2025 and 2026 earnings per share estimates to $11.40 and $11.16, respectively, down from previous projections of $12.74 and $12.92.
In other recent news, Crocs, Inc. reported a strong first quarter in 2025, with international revenue rising 12.3% on a foreign exchange neutral basis. Williams Trading responded by upgrading Crocs to a Buy rating and significantly raising the price target from $83 to $135, citing better-than-expected sales of the HEYDUDE brand. Meanwhile, UBS adjusted its price target for Crocs to $110, maintaining a Neutral rating due to mixed fundamental trends observed in the second quarter. Piper Sandler reaffirmed an Overweight rating with a $120 price target, expressing confidence in Crocs’ strategy despite market challenges and concerns about pricing and order cancellations. Stifel maintained a Buy rating and a $127 price target following the promotion of Terence Reilly to Executive Vice President, Chief Brand Officer, a move seen as beneficial given his extensive experience. Reilly will oversee marketing and communications for both Crocs and HEYDUDE brands. Additionally, a significant reduction in tariffs on Chinese goods, from 145% to 30%, was announced, which had not been included in Crocs’ initial projections. This tariff reduction is viewed as a positive development amid the company’s cautious outlook for the full year 2025.
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