Investors are taking big steps with their Crocs (CROX -0.82%) these days. The maker of distinctive footwear closed out last week with back-to-back days of double-digit percentage gains. Crocs stock soared 14% after the company posted blowout financial results. It followed that up with an 11% pop on Friday. 

The stock is still trading for less than half of its all-time peak, but the 27% surge over the past two trading days finds it at a nine-month high. Let's walk a mile in Crocs' shoes. You may have to put up with some odd looks given the polarizing nature of Crocs -- both as a fashion statement and an investing decision -- but sometimes being comfortable is more important than what others might think. 

Six people showing off their Crocs footwear.

Image source: Crocs.

The sum is better than the holes 

The third quarter was solid for Crocs. Consolidated revenue soared 57% to $985.1 million, up an even better 63% on a constant currency basis. Before you get too excited, let's point out that this isn't all organic growth. Crocs closed on its acquisition of Heydude shoes in mid-February, so the year-over-year comparisons don't include that fast-growing product line in 2021. 

It's still a big beat. Crocs was only forecasting 47% to 52% top-line growth for the quarter three months ago. Analysts -- also knowing full well that Heydude was an incremental bonus -- were modeling a 51% gain.

The namesake brand is holding up better than expected. Organic revenue is up 14% (or up 20% on a constant currency basis), accounting for 73% of the top-line mix. Heydude is smaller, but it's also growing a lot faster. The new brand in Crocs' portfolio saw its business soar 87%. Crocs is proving that it can take on a new brand and accelerate sales for the acquired platform. Keep this in mind the next time Crocs shares sell off after management announces a new deal.

Margins did contract, as higher input, freight, and inventory handling costs ate into its markups. Adjusted earnings per share still rose 20% to $2.97. Wall Street pros were settling for just $2.61 a share in earnings, making this the third quarter in a row that Crocs delivers a double-digit percentage beat on the bottom line. How refreshing is it to see sound beat on revenue and adjusted profitability this earnings season? Wait. It gets better.

Crocs also did something that you haven't seen a lot of companies do lately: It boosted its guidance. It now sees consolidated revenue climbing 49% to 52% for all of 2022. It also narrowed its full-year earnings per share guidance from between $9.50 and $10.30 to $9.95 and $10.30 this year. Yes, most of those upward revisions are roughly the size of the third-quarter beat, but we've already seen how conservative Crocs can be with its projections in recent reports. 

You'll like the valuation here. Even after the stock's 27% pop through the final two trading days of last week, Crocs is trading for just 8 times the midpoint of this year's projected earnings. This is a single-digit earnings multiple for a company clocking in with double-digit organic growth on both ends of the income statement. Even when we lap the Heydude acquisition on Feb. 17, this is still going to be a company growing faster than its current earnings multiple.  

Crocs stands out as a sprinter in a world of historically slow-walking shoe stocks. It has debunked the bearish thesis that the shoes are faddish, posting annual sales growth in all but a quarter of the past 20 years. An acquisition may have padded last week's monster top-line surge, but Crocs is cheap and comfortable -- just like its very popular shoes.