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On Thursday, Stifel analysts adjusted their outlook on Crocs stock (NASDAQ:CROX), reducing the price target from $138.00 to $127.00, while reaffirming their Buy rating on the shares. The firm cited the brand's enduring appeal in North America and its continued product and geographic diversification as key factors enhancing their confidence in the company's sustainable earnings power. According to InvestingPro data, Crocs maintains impressive gross profit margins of 59% and trades at an attractive P/E ratio of 6.2x.
Stifel highlighted Crocs' sector-leading return characteristics and balance sheet flexibility, which, coupled with what they consider an undemanding valuation, underpin their positive stance on the stock. The new $127 price target is based on 7.5 times the enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) on their estimated calendar year 2025 earnings of $1,098 million. InvestingPro analysis suggests the stock is currently undervalued, with a return on invested capital of 25% demonstrating strong operational efficiency.
The analysts also noted several risks that could impact their price target, including the potential fashion risk associated with Crocs' sales concentration, the uncertain consumer reception of new styles, limited visibility into the business in international markets, competitive pressures, and foreign exchange risk. Discover 12 additional key insights about Crocs with an InvestingPro subscription, including exclusive financial health scores and detailed valuation metrics.
Despite these risks, Stifel's valuation reflects a belief in the company's ability to continue generating robust earnings. The firm's commentary suggests that the strengths of Crocs' brand and financials are expected to drive performance, even as they acknowledge the challenges that lie ahead. The company's overall financial health score of 3.39 from InvestingPro indicates a strong financial position, supporting the positive outlook.
In other recent news, Crocs has been the focus of several key developments. UBS raised its price target for Crocs to $132, maintaining a Neutral rating, following the company's fourth-quarter 2024 earnings that slightly exceeded expectations. The analyst cited the company's low-growth perception, projecting a modest 1% EPS CAGR over five years. Meanwhile, BofA Securities increased its price target for Crocs to $153, reiterating a Buy rating. The revision came after a positive earnings report, highlighting strong fourth-quarter performance and unexpected growth in direct-to-consumer sales for the HeyDude brand. BofA also raised its 2025 EPS forecast for Crocs by 6% to $13.30, driven by stronger sales projections and an improved margin outlook. Additionally, Stifel maintained its Buy rating on Crocs, with a price target of $138, emphasizing the company's strong margin profile and international growth prospects. On the executive front, Crocs announced the resignation of Adam Michaels, Executive Vice President and Chief Digital Officer, effective May 2025, with a separation agreement that includes non-compete and non-solicitation clauses.
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