Crocs Stock Gained 11%, Room To Run More?

by Trefis Team
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Crocs (NASDAQ: CROX), a company designing, manufacturing, and marketing footwear for men, women, and children under the Crocs brand, has increased 11% over the last twenty-one trading days (one month) and currently stands at near $155. It should be noted that the broader S&P500 returned a flat growth during the same period. Going forward, we expect the company’s stock to continue to grow. Last week, the footwear retailer held its investor day and projected revenues of over $5 billion by 2026. For context, the consensus is estimating revenue of $2.27 billion for 2021. The company also forecast an adjusted operating margin of over 26% over the long term, based on future investments in the Asia region, digital growth, capital expenditure, and marketing. To add to this, Crocs introduced a new shoe made of a bio-based material as part of its sustainability push to become a net-zero carbon company by 2030. All these developments were applauded by the investors which led to the stock gains.

Crocs reported a record revenue growth of 93% year-over-year (y-o-y) in the recent Q2. In fact, the company’s operating income more than tripled y-o-y, and the company predicted a 60% to 65% revenue increase for the full year compared to 2020. We believe that the company’s stock looks undervalued after this strong performance and could see gains in the near term. Specifically, there is a 65% chance of a rise for CROX stock over the next month (twenty-one trading days) based on our machine learning analysis of trends in the stock price over the last ten years. See our analysis on CROX Stock Chance of Rise for more details.

Calculation of ‘Event Probability’ and ‘Chance of rising’ using last 10 year data

[1] 7.7% or higher return during five-day period in 242 times out of 2517; Stock rose in the next 5 days in 110 of these 242 instances

[2] 12% or higher return during ten-day period in 217 times out of 2517; Stock rose in the next 10 days in 120 of these 217 instances

[3] 11% or higher return during twenty-one-day period in 618 times out of 2516; Stock rose in the next 21 days in 400 of these 618 instances

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