Crocs Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of holey shoe hawker Crocs (Nasdaq: CROX  ) climbed more than 10% in intraday trading as analysts bumped up their price targets on the stock.

So what: Last week, Crocs shares dipped after reporting earnings despite the fact that the company's results beat Wall Street's expectations. Crocs delivered 22% year-over-year sales growth and operating profit that more than tripled. On a GAAP basis, the company posted net income growth of 13%, but excluding tax benefits and other one-time items, bottom-line profit of $22 million was far above last year's $1.8 million. Mr. Market looked past all of that though, and shares actually declined slightly the day after the announcement. Wall Street analysts pushed the momentum back in the other direction today as a few of them all came up with higher price targets for the stock.

Now what: After falling on hard times, Crocs has been working on restructuring and refocusing aimed at broadening the company's business and putting it back on a solid financial footing. Based on the company's third-quarter results, it certainly looks like things are moving in the right direction. But should investors be buyers of the stock right now? According to data from Capital IQ, the average analyst target price is $17.40, or roughly 10% above today's price -- that's a positive, but not overly compelling. Combine that with a 2011 expected price-to-earnings ratio of nearly 18, and I'm not sure there's reason to be gaga over the shares right now.

Want to keep up to date on Crocs? Add it to your watchlist by clicking here.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy assures you no Wookiees were harmed in the making of this article.


Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1361899, ~/Articles/ArticleHandler.aspx, 10/2/2014 12:49:57 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement