CROX - Crocs' Turnaround May Already Be Here - Potential Doubling Ahead

2024-03-09 10:00:00 ET

Summary

• We are finally rerating Crocs stock to a Buy, as the management continues to prioritize shareholder returns and balance sheet deleveraging, despite the HeyDude headwinds.
• HeyDude's inventory correction is expected to bottom by H1'24, with H2'24 likely to bring forth improved sales, triggering the management's promising FY2024 guidance.
• Combined with the discounted valuations, we may see CROX potentially double over the next few years, assuming a rerating in its FWD P/E nearer to its historical and sector means.

We previously covered Crocs, Inc. ( CROX ) in December 2023, discussing why the stock's recovery from the October 2023 bottom was likely to be unsustainable. This was attributed to the decelerating growth of its core brand and HeyDude's disappointing performance, worsened by the slowing sales in the North American region....

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