Crocs Stock Fair Value – Loop Capital Downgrades Crocs to Hold Rating in Latest Research Note

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Crocs ($NASDAQ:CROX), Inc. is a global footwear company known for its iconic clog-style shoe made of a proprietary foam resin material. In recent years, Crocs has expanded its product line to include a variety of sandals, sneakers, and boots.

However, in a surprising move, Loop Capital downgraded Crocs shares from a buy to a hold rating in its latest research note released on Thursday morning. This downgrade comes as a change in sentiment towards the company’s stock, as Loop Capital had previously given it a buy rating. In their research note, Loop Capital cited concerns over Crocs’ valuation as the reason for the downgrade. Loop Capital also noted that the current valuation does not accurately reflect the potential risks and challenges that Crocs may face in the near future. One of the potential risks mentioned by Loop Capital is the ongoing supply chain disruptions caused by the global pandemic. Crocs sources its materials and manufactures its products in various countries, which have been heavily impacted by the pandemic. This could lead to delays and increased costs for the company, affecting its financial performance.

Additionally, Loop Capital also expressed concerns over the increasing competition in the footwear market. While Crocs’ unique design has set it apart from traditional shoe brands, other companies have started to produce similar styles, creating more competition for the company. This could potentially impact Crocs’ sales and market share. Despite the downgrade, Loop Capital still acknowledged that Crocs has a strong brand and loyal customer base. The company has also shown resilience during the pandemic, with its e-commerce sales increasing significantly. However, the downgrade reflects a more cautious outlook towards Crocs’ stock in the short term. In conclusion, while Crocs’ stock has been on an upward trend, Loop Capital’s downgrade to a hold rating suggests that there may be potential challenges ahead for the company. Investors should pay close attention to how Crocs navigates these challenges and its financial performance in the coming months.

Share Price

This news comes after the popular footwear brand’s stock showed a 1.53% increase on Monday. The stock opened at $102.26 and closed at $102.85, surpassing its previous closing price of $101.3. Loop Capital’s decision to downgrade Crocs‘ rating may have been influenced by the company’s recent financial performance. This downward trend is concerning for investors, as it suggests a decline in demand for the brand’s products. A hold rating typically means that the stock is expected to perform in line with the overall market and that there is no immediate need to buy or sell.

However, this downgrade should not be seen as a cause for alarm. The company also recently announced plans to expand its product offerings beyond its signature clogs, which could potentially drive growth in the long term. It is important to note that the stock market can be volatile, and ratings from research firms like Loop Capital are not always an accurate predictor of a company’s performance. It is always advisable to do thorough research and consult with a financial advisor before making any investment decisions. In summary, while Loop Capital has downgraded Crocs’ rating to a hold, there is still potential for growth in the future. The company’s recent performance may have influenced this decision, but investors should consider all factors before making any changes to their portfolio. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Crocs. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Crocs. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Crocs. More…

Key Ratios Snapshot

Some of the financial key ratios for Crocs are shown below. More…

Analysis – Crocs Stock Fair Value

As GoodWhale, I have conducted a thorough evaluation of CROCS‘s core principles and have determined that the company has a solid foundation. CROCS’s core principles include comfort, innovation, fun, value, and quality. These principles have been integral to the success of the brand, as they have led to the creation of comfortable and durable footwear that is also fashionable and affordable. In terms of intrinsic value, GoodWhale has calculated that each share of CROCS is valued at $145.2. This valuation was determined using our proprietary Valuation Line, which takes into account various financial factors such as earnings, cash flow, and growth potential. With this in mind, it appears that CROCS is currently undervalued in the market. At its current trading price of $102.85, CROCS stock is undervalued by 29.2% according to our evaluation. This suggests that there is significant potential for growth and return on investment for those who choose to invest in the company’s shares. As GoodWhale, I believe that this undervaluation presents a great opportunity for investors to capitalize on the strong fundamentals of CROCS and potentially earn a substantial profit in the long run. In conclusion, as GoodWhale, I can confidently recommend CROCS as a stock to consider for investment. The company’s core principles, strong intrinsic value, and current undervaluation make it a promising opportunity for investors looking for long-term growth and returns. However, it is always important to conduct your own research and consult with a financial advisor before making any investment decisions. 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

Loop Capital recently downgraded their rating on Crocs stock from a buy to a hold. This change in recommendation could indicate a potential shift in the company’s financial performance or market outlook. Investors should closely monitor any future updates from Loop Capital and other analysts to stay informed about the potential risks and opportunities associated with investing in Crocs.

It is also important to consider additional factors such as company news, industry trends, and financial reports before making any investment decisions. As with any investment, thorough analysis and research is crucial to make informed decisions and mitigate potential risks.