It hasn't been a smooth ride for Crocs (CROX 1.53%) in recent years. From their mid-March 2020 low to their all-time high in November 2021, the shares skyrocketed nearly 1,600%. But a general risk-off sentiment from investors in the face of the Federal Reserve's aggressive rate-hiking stance seriously crushed the stock in the first half of 2022. 

Although shares of this footwear business have recovered nicely in the past 15 months, they are still 46% off their peak price. Even more alarming, Crocs hasn't benefited from the broader market's rally in 2023, actually losing money for investors this year. 

But there are lots of reasons to be optimistic. Continue reading to understand why Crocs is a top beaten-down growth stock to buy right now. 

A strong brand 

Consumer products companies can build a competitive advantage with powerful brand recognition. And thanks to its incredibly popular foam clogs, which account for the vast majority of overall revenue, it seems like Crocs has become a household name. 

According to Piper Sandler, Crocs was rated as the sixth-best shoe brand in a survey of teenagers (Nike was No. 1). The company's other casual footwear brand, HeyDude, ranked eighth on that list. Both positions were an improvement on a year-over-year basis. 

That's just what Crocs needs in a highly competitive industry: a way to stand out and draw customer interest. So far, the business is doing well in this regard. Revenue was up 11% in the last quarter, healthy growth that's even more impressive when you consider that sales jumped 51% in the year-ago period. 

That brand strength is also bolstered by a notable online presence. In the most recent quarter, 39% of revenue came from the digital channel, which helps increase visibility and build direct connections with consumers. 

Excellent profitability 

Crocs is an extremely impressive business based strictly on its profitability metrics. Boosted by the brand's presence, the gross margin has averaged a stellar 53.9% in the past five years.

That gross margin is better than what Nike put up in its latest fiscal quarter. Consumers are willing to pay a huge markup for the company's products, and Crocs can reduce costs and design and manufacture footwear in a lucrative way. 

This has produced remarkable bottom-line growth, too. Between 2019 and 2022, Crocs' diluted earnings per share (EPS) rose at a compound annual rate of 74%. By leveraging its fixed costs, management has quickly increased net income. 

Profitability is superb, but Crocs currently carries a $2 billion debt burden, primarily from the $2.5 billion purchase of HeyDude in December 2021. The good news is that this debt balance is down from just three months ago, thanks to management's intense focus on improving the company's financial position. The consistent free cash flow it generates allows it to continue paying down its debt. 

A cheap valuation 

Investors aren't being asked to pay much at all for an ownership stake in this business. As of this writing, the shares trade at a trailing price-to-earnings (P/E) ratio of 9.1.

That screams value on its own, and it's even cheaper than Crocs' three-year historical P/E of 13.1. For comparison's sake, Nike's P/E is 30.4, while the P/E for the S&P 500 is 20.5. 

But not only is this a value stock, Crocs can satisfy the cravings of growth investors as well. According to consensus analyst estimates, the company is projected to increase revenue and diluted EPS at annualized rates of 10% and 17%, respectively, between 2022 and 2027. 

Given that rosy outlook, this could be one of the best times to add this footwear stock to your portfolio.