Crocs Intrinsic Value Calculation – Be Aware: 3 Risks Investors Should Consider Before Investing in Crocs,
June 14, 2023
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Before investing in Crocs ($NASDAQ:CROX), Inc., it is important for investors to be aware of the potential risks associated with the company. Crocs designs, develops, manufactures, markets, and distributes its products around the world. The company faces competition from a variety of sources, including domestic and international brands, independents, fashion-oriented companies, and department stores. With increased competition, Crocs’ market share could be at risk of shrinking. The second risk investors should consider is the company’s reliance on the sale of its footwear products.
As a footwear manufacturer, sales of Crocs’ products are highly dependent on consumer preferences and industry trends. A sudden shift in consumer preferences or changes in industry trends could lead to decreased demand for Crocs’ products and a decrease in sales. Fluctuations in currency exchange rates and international political and economic conditions could affect the company’s profitability and ability to conduct business abroad. By taking into account these three potential risks when investing in Crocs, Inc., investors can make more informed decisions about their investments.
Market Price
On Tuesday, Crocs stock opened at $116.7 and closed at $114.8, down by 0.7% from the last closing price of 115.6. The first risk to consider is the company’s reputation. Crocs has had some issues in the past with product quality and customer service. While the company has taken steps to address these issues, it is still something that potential investors should be aware of before investing in the company. The second risk is the competition. As more and more companies enter the footwear industry, Crocs’ market share is likely to be impacted. This could lead to lower sales and decreased profits for Crocs in the future, which could have an adverse impact on the company’s stock price.
The third risk for investors to consider is the possibility of a slowdown in the global economy. If consumer spending decreases, Crocs’ sales could suffer as well. This could lead to further declines in the company’s stock price and lower returns for investors. Overall, Crocs is still a solid investment opportunity for investors, but these risks should not be overlooked. By considering these risks before investing in Crocs, investors will be better prepared for any potential downturns that may occur in the future. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Crocs. More…
| Total Revenues | Net Income | Net Margin |
| 3.78k | 616.94 | 16.3% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Crocs. More…
| Operations | Investing | Financing |
| 681.84 | -107.21 | -622.13 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Crocs. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 4.6k | 3.63k | 15.62 |
Key Ratios Snapshot
Some of the financial key ratios for Crocs are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 45.9% | 102.3% | 25.7% |
| FCF Margin | ROE | ROA |
| 15.6% | 67.9% | 13.2% |
Analysis – Crocs Intrinsic Value Calculation
GoodWhale recently conducted an analysis of CROCS’s wellbeing. Through our proprietary Valuation Line, we concluded that the fair value of CROCS share is around $151.0. Currently, CROCS stock is being traded at $114.8, meaning it is undervalued by 24.0%. We believe that this could be a good opportunity for investors to buy in and potentially benefit from the stock’s growth. Crocs“>More…
Peers
Its competitors are Nike Inc, Skechers USA Inc, and Wolverine World Wide Inc.
– Nike Inc ($NYSE:NKE)
Nike is one of the largest sporting goods companies in the world. They design, develop, and manufacture footwear, apparel, and equipment for a variety of sports and fitness activities. Nike’s market cap as of 2022 is 138.47B. Their return on equity is 25.1%. Nike’s products are sold in over 190 countries worldwide.
– Skechers USA Inc ($NYSE:SKX)
Skechers USA Inc has a market cap of 5.44B as of 2022, a Return on Equity of 10.49%. The company is engaged in the design, development, marketing and sale of footwear for men, women and children.
– Wolverine World Wide Inc ($NYSE:WWW)
Wolverine World Wide Inc is a footwear company that designs, manufactures, and markets a range of shoes for men, women, and children. The company has a market cap of 1.3B as of 2022 and a Return on Equity of 18.81%. Wolverine World Wide is a publicly traded company on the New York Stock Exchange (NYSE) under the ticker symbol WWW. The company was founded in 1883 and is headquartered in Rockford, Michigan.
Summary
Investing in Crocs, Inc. is a risky endeavor. Three potential risks to consider are the company’s financial health, competitive landscape, and product diversification. The competitive landscape is also a concern as Crocs faces competition from other footwear and apparel companies.
Lastly, Crocs’ product diversification is a risk as the company relies heavily on its core clog product. To mitigate these risks, investors should conduct thorough research into the company’s financials, competitive landscape, and product diversification strategy.
