Crocs Stock Up 5% in September – Time to Buy CROX Stock?

The price of Crocs stock has gone up nearly 5% so far in September following a pronounced 8.5% uptick it experienced yesterday after the company’s Investor Day presentation.

Among some of the most relevant announcements made by the company, the management team set forth ambitious targets for some key financial metrics for 2026 including forecasted revenues of $5 billion, adjusted operating margins of 26% or higher, and annual free cash flows above $1 billion.

Moreover, the Colorado-based footwear company announced that it expects to repurchase up to $500 million of its stock before the end of its fiscal third quarter of 2021 while digital channels should account for nearly 50% of the firm’s sales by the end of 2026 as well.

In the following article, I’ll attempt to explain why the market has reacted so positively to these news and what could be expected from the stock in the near future in light of these developments.

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Crocs Stock – Technical Analysis

The price action for Cross have failed two times already in the past 30 days to climb above the $148 level and yesterday’s uptick retraced during the session almost below this level despite the positive sentiment instilled by the company’s announcements.

Trading volumes during the session were quite elevated as more than 7 million shares exchanged hands – a figure that exceeded the 10-day average by more than 5 times.

Momentum oscillators had been quite negative before this uptick and yesterday did not change things much as the MACD remained below the signal line while histogram readings turned negative amid the significant intraday decline the stock experienced.

Moving forward, the 50-day simple moving average appears to be acting as strong support for the price action and, as long as the price remains above that level, the outlook will continue to be bullish for CROX stock and it would be plausible to expect a break above the $148 threshold at some point.

Crocs Stock – Fundamental Analysis

Crocs sales were relatively stalled from 2016 to 2018 but they started to experience significant growth in 2019 as they surged 13% on that year and then experienced another 13% uptick in 2020 during the pandemic as the demand for the company’s comfortable footwear soared during lockdowns.

Profit margins for the company have been quite good in the past with gross margins progressively improving to the high 50s while EBITDA margins have been getting better as well as they moved from 9.5% back in 2018 to almost 28% in the past 12 months. A similar improvement has been seen in the firm’s bottom-line margins as well.

According to multiple sources, the Crocs brand is the most successful and well-regarded slippers brand in the world, even surpassing Nike in this particular segment in terms of consumer recognition.

The company has a relatively small long-term debt and reported total assets of $1.49 billion in the past quarter including $198 million in cash.

At its current market capitalization of $9.32 billion, if the management achieves its goal of producing $5 billion in revenue in the next five years that would mean the business is heavily undervalued at the moment considering its elevated top and bottom line profit margins.

Meanwhile, a $1 billion free cash flow target seems more than feasible considering that the firm has already produced around $430 million in FCF in the past twelve months and, using that estimate for 2026, the firm is being valued at the moment at only 9 times that figure.

Moving forward, the outlook for Crocs is bullish as the company can easily double and even triple its market capitalization in the next five years or better if it reaches those ambitious goals.

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