Earn 9.4% Today or Buy CROX 40% Cheaper – It’s a Win-Win
At about $83.92 a share, Crocs (CROX) is trading about 30% below its 52W high.
Do you think CROX stock is a good long-term bet at current levels? What about at a 40% discount at about $50 per share? If you think that is a steal, and have some cash ready to go, here is a trade.
9.4% annualized yield at 40% margin of safety, by selling Put Options.
- Sell a long-dated Put option expiring 1/15/2027, with a strike price of $50
- Collect roughly $261 in premium per contract (each contract represents 100 shares)
- That’s about 5.4% annualized yield on the $5,000 you’re setting aside for the possibility of buying the stock
- This cash parked in a savings or money market account will earn an extra 4.0%, taking total yield to 9.4%
- And you give yourself a chance to buy CROX stock at deep discounted price of $50
However, this is not the only stock strategy in town. Trefis High Quality Portfolio is a sophisticated framework designed to reduce stock-specific risk while giving upside exposure.
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Possible Trade Outcomes: You Win Either Way
| Stock Price Outcome | What It Means For You |
|---|---|
| CROX stays above $50 | You keep the full $261 premium – 5.2% extra income over the next 350 days on cash that might otherwise earn you 4.0% or less. You never buy the stock and simply walk away with the cash. |
| CROX closes below $50 | You’ll be obligated to buy 100 shares at $50. But thanks to $261 premium, your effective cost basis is just $47.39 per share – a roughly 44% from current level. |
But to hold this trade with conviction, you want to see long term upside in the stock. Because if it comes to it, you want to be excited about buying the stock cheap.
First, you want fundamentals to check out. For details, see Buy or Sell CROX Stock or check Crocs Investment Highlights
Second, you want to better understand competitive advantage and industry tailwinds. Below is what specifically gives us the conviction.
Why Hold CROX Stock Long-Term
Crocs possesses a strong, culturally relevant brand with demonstrated pricing power within a secularly growing casual footwear market. The core Crocs brand continues to show robust demand and sales growth. While the HeyDude acquisition presents challenges, the company’s strong free cash flow allows for debt reduction and share repurchases, enhancing shareholder value. Should the stock be assigned, we would be comfortable holding a company with a powerful brand and a solid position in a long-term growth market.
Competitive Advantage
We classify CROX’s economic moat as NARROW, with the primary source being Brand
- Crocs has successfully increased its average selling price from $18 to $26 between 2019 and 2024 while nearly doubling unit sales, indicating strong pricing power.
- The brand commands significant loyalty, with a study showing a 60.7% repurchase intention among consumers, driven primarily by brand reputation.
- Market share in the global footwear industry grew from 0.3% in 2018 to 1.0% in 2024, demonstrating an increasing consumer preference for the brand over competitors.
- High-profile collaborations with celebrities like Post Malone and Justin Bieber, and fashion brands like Balenciaga, have transformed the brand into a cultural phenomenon, enhancing its mindshare.
See Crocs Full Analysis.
Industry Tailwind
The industry tailwind is STRONG, with CAGR projection of 11.4% (Source: Grand View Research)
Secular Trend: Shift to Casualization and Comfort
Key Risks: The primary risks are potential shifts in fashion trends and the ongoing challenges with integrating and revitalizing the HeyDude brand, which has seen declining sales.
Financial Guardrails
Cash Generation: Positive Free Cash Flow
Balance Sheet: As of the full year 2024, the company generated approximately $990 million in operating cash flow and paid down about $320 million in debt. As of September 2025, total borrowings were approximately $1.32 billion with cash and cash equivalents of about $154 million, indicating a manageable net debt position and low risk of bankruptcy.
Not comfortable with options or stock-specific trades? PORTFOLIOS are even better.
Why Stock Pickers Win More With Multi Asset Portfolios
Stocks can jump or crash but different assets move on different cycles. A multi asset portfolio helps you stay invested while cushioning swings in equities.
The asset allocation framework of Trefis’ Boston-based, wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner’ strategy now includes Trefis High Quality Portfolio, which has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices