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Crocs (CROX) Gains But Lags Market: What You Should Know

Zacks Equity Research

Crocs (CROX) closed at $23.67 in the latest trading session, marking a +0.51% move from the prior day. This change lagged the S&P 500's 0.74% gain on the day. Meanwhile, the Dow gained 0.19%, and the Nasdaq, a tech-heavy index, added 1.11%.

Heading into today, shares of the footwear company had gained 19.97% over the past month, outpacing the Consumer Discretionary sector's gain of 2.47% and the S&P 500's gain of 3.18% in that time.

Wall Street will be looking for positivity from CROX as it approaches its next earnings report date. This is expected to be August 1, 2019. In that report, analysts expect CROX to post earnings of $0.48 per share. This would mark year-over-year growth of 37.14%. Meanwhile, our latest consensus estimate is calling for revenue of $357.23 million, up 8.91% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.25 per share and revenue of $1.16 billion, which would represent changes of +45.35% and +6.77%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for CROX. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. CROX is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, CROX is currently trading at a Forward P/E ratio of 18.92. This represents a premium compared to its industry's average Forward P/E of 14.08.

We can also see that CROX currently has a PEG ratio of 1.26. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Textile - Apparel was holding an average PEG ratio of 1.4 at yesterday's closing price.

The Textile - Apparel industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 74, which puts it in the top 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow CROX in the coming trading sessions, be sure to utilize Zacks.com.

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