With shares of Crocs (NASDAQ:CROX) trading at around $14.19, is CROX an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
C = Catalyst for the Stock’s Movement
When most people hear the word “Crocs” they think of Clogs. This makes sense since Clogs are what got Crocs on the map. However, the problem is that too many people don’t realize that Crocs has been expanding its product line well beyond Clogs. Crocs now has more fashionable fleece-lined shoes, accented boots for cold weather, and much more. Crocs is branching out away from its core product. In the short term, this might seem risky, but in the long run, it’s necessary in order for the company to survive and avoid being a fad. Crocs is turning itself into a casual lifestyle footwear company instead of just a Clogs company. This should attract new consumers over the long haul, but there will be obstacles. We will cover these obstacles in the Trends section.
For now, it’s important to note that Crocs just announced that Q4 revenue will be $220 million. The estimate was for $219.38 million. Crocs revealed that the company suffered from a difficult holiday sales environment. This is not what investors wanted to hear, which is why the stock got hammered yesterday.
Let’s take a look at some important numbers in order to get a better idea of the Crocs situation…