Hearing the words "Balenciaga," as in the luxury shoe brand, and "Crocs," as in the ugly plastic sandal, in the same sentence sounds like a contradiction in terms. Therefore, it must have taken quite the visionary to distill the outcome of this unlikely melding, which has proven a fashion coup.

Polar opposites and profits

The Crocs (NASDAQ:CROX) brand first came on the scene in 2006, and their quirky, easy-to-wear design was an immediate hit with the high-street shopper from kids to teens to adults. Balenciaga, on the other hand, is quite a different animal. The brand brings to mind high-end, high-heeled stilettos meant only for the fashion-obsessed and comfort-oblivious poised elites.

Two pair of Crocs stick in rocks near the ocean

IMAGE SOURCE: GETTY IMAGES

Nevertheless, in 2017, a collaboration between these two polar opposites created the croslite-based Balenciaga platform sandal. This Croc clog on a plastic platform base took the shoe market by storm. Initially, the shoes could be pre-ordered  on sites like Barneys of New York at a price point ranging between $495 and $850, while a basic pair of Crocs could be had for less than $40. As of the writing of this article, these shoes were still sold out online. Had the whole world gone sandal mad?

Can such pairings persist?

While Kering -- parent company to Balenciaga and other well-to-do brands such as Gucci, Yves Saint Laurent, and Alexander McQueen -- has enjoyed steady earnings, Crocs has had a more volatile history. When the company went public in 2006, Crocs stock price was around $13, and the company was met with immediate success, peaking in 2007 with a stock price at around $66. Crocs fared poorly through the financial crisis but has steadily grown since then, with a current stock price of around $28. Kering, on the other hand, has seen a steady increase in its stock price . For reference, in 2011 the stock hovered around $17 but now trades around $52 in September 2019. Kering benefited from surging e-commerce and online growth and the increasing appetite for U.S. luxury brands in Asian markets such as China and South Korea.

This collaboration between Crocs and Balenciaga has been a success, but investors are wondering if Crocs can keep up the momentum in 2020. At the moment, it seems so. The brand's popularity is showing no signs of waning among teens, and other fashion brands are eager to be Crocs' next collaborator.

Collaborators abound

Crocs partnered with Vera Bradley in the summer of 2019, and the final designs once again sold out. On July 15, 2019, Crocs share price rose 7% after Piper Jaffray's Erinn Murphy upgraded the stock from neutral to overweight, raising her per-share price target by $5 to $27. In July, Urban Outfitters was the lucky finalist announcing a limited edition release of Crocs at ComplexCon Chicago.  Some collaborations even sell unique inserts and accessories for Crocs at prices that hover around $70. Whether it be tie-dye, platform, or stiletto heels, the ideas keep coming.

Confidence in the financials

Shares of Crocs are up 30% over the past year. The company has continued to beat expectations in the past two quarters, and is now valued at $1.95 billion.

The stock dropped in May by approximately 30%, which was largely a knee-jerk reaction to tariff concerns and a possible trade war with China. There also may have been concerns that Crocs could not meet demand, or perhaps it did not want to keep up with demand in order to stimulate sales. Either way, confidence is high at the Crocs shop.  After Crocs reported first-quarter 2019 earnings, its board increased its share repurchase authorization by $500 million, indicating that the company considers its stock undervalued.

For Crocs, it's all about the next collaboration. Whether Crocs' next partner is with a luxury name such as Gucci, a sports powerhouse such as Nike, or a social influencer such as Post Malone, Gen Z has a love for anything retro. What's next? The croslite Fila winklepicker? The options are endless for Crocs -- and its curious investors.