Crocs Stock Up 30% In A Week – What’s Happening?

CROX: Crocs logo
CROX
Crocs

Crocs stock (NASDAQ: CROX), a company designing, manufacturing, and marketing footwear for men, women, and children under the Crocs brand, experienced a robust 31% gain over the last week (five trading days) to levels of around $106 currently. Crocs’ stock exploded higher after beating revenue estimates for its Americas and EMEA businesses, as well as topping gross margin and operating margin expectations in its Q1 report. There is more to it – the comfy footwear company also expects upcoming Q2 revenue growth of +60% to +70% vs. +40% consensus and non-GAAP operating margin of between 21% and 23%. Having said that, the company’s management believes the demand for the Crocs brand is stronger than ever with an expected 2021 revenue guidance of 40% to 50%.

But will the company’s stock see higher levels over the coming weeks, or is a decline in the stock imminent? According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price, returns for CROX stock average around 20% in the next one month (twenty-one trading days) period after experiencing a 30.7% rise in a week.

But how would these numbers change if you are interested in holding Crocs for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test Crocs stock chances of a rise after a fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!

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MACHINE LEARNING ENGINE – try it yourself:

IF CROX stock moved by -5% over five trading days, THEN over the next twenty-one trading days, CROX stock moves an average of 3.7%, which implies an excess return of 2.6% compared to the S&P500.

More importantly, there is a 59% probability of a positive return over the next twenty-one trading days and a 55% probability of a positive excess return after a -5% change over five trading days.

Some Fun Scenarios, FAQs & Making Sense of Crocs Stock Movements:

Question 1: Is the average return for Crocs stock higher after a drop?

Answer: Consider two situations,

Case 1: Crocs stock drops by -5% or more in a week

Case 2: Cocs stock rises by 5% or more in a week

Is the average return for Crocs stock higher over the subsequent month after Case 1 or Case 2?

Crocs stock fares better after Case 1, with an average return of 3.8% over the next month (twenty-one trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 2.8% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next twenty-one trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how Crocs stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer: If you buy and hold Crocs stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For CROX stock, the returns over the next N days after a -5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:You can try the engine to see what this table looks like for Crocs after a larger loss over the last week, month, or quarter.

Question 3: What about the average return after a rise if you wait for a while?

Answer: The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although CROX stock appears to be an exception to this general observation.

CROX returns over the next N days after a 5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

It’s pretty powerful to test the trend for yourself for Crocs by changing the inputs in the charts above.

For further comparison among peer groups, it is helpful to see how they stack up. Check out Crocs Stock Comparison With Peers to see how Crocs compares against peers on metrics that matter.
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