Can Crocs Stock Rebound From Here?
Crocs‘ (NASDAQ: CROX) stock is down 18% in 2025, lagging the S&P 500’s 8% decline, as mixed brand performance weighs on investor sentiment. The core Crocs Brand remains strong, delivering 9% revenue growth in 2024 and accounting for 80% of total sales, while the $2.5 billion HeyDude acquisition continues to underperform with a 13% decline in its revenue. Despite this, Crocs posted an impressive 20%+ adjusted operating margin in Q4, outperforming peers like Nike (NYSE: NKE). Yet the stock trades at just 6x forward earnings, suggesting potential undervaluation.
The company is also navigating external pressures from shifting U.S. trade policy. About 50% of Crocs’ production is based in Vietnam, which recently received a temporary 90-day reprieve from proposed 46% tariffs. Crocs also utilizes third-party manufacturers in China, where tariffs have surged to 145%. While these headwinds could pressure margins, the impact could likely be manageable, with the company continuing to invest in digital transformation and global expansion.
The company’s stock looks like a good pick at around $90. However, we believe there are some minor concerns with CROX stock, which makes it risky in conjunction with its current valuation being somewhat low. We arrive at our conclusion by comparing the current valuation of CROX stock with its operating performance over the recent years, as well as its current and historical financial condition. Our analysis of Crocs is along key parameters—Growth, Profitability, Financial Stability, and Downturn Resilience, as detailed below.
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How does Crocs’ valuation look vs. the S&P 500?
Going by what you pay per dollar of sales or profit, CROX stock looks cheap compared to the broader market.
• Crocs has a price-to-sales (P/S) ratio of 1.3 vs. a figure of 2.8 for the S&P 500
• Additionally, the company’s price-to-operating income (P/EBIT) ratio is 5.4 compared to 21.3 for S&P 500
• And, it has a price-to-earnings (P/E) ratio of 5.8 vs. the benchmark’s 21.3
How have Crocs’ revenues grown over recent years?
Crocs’ Revenues have seen some growth over recent years.
• Crocs has seen its top line grow at an average rate of 22.9% over the last 3 years (vs. increase of 6.2% for S&P 500)
• Its revenues have increased 3.5% from $4.0 Bil to $4.1 Bil in the last 12 months (vs. growth of 5.3% for S&P 500)
• Also, its quarterly revenues grew 3.1% to $990 Mil in the most recent quarter from $960 Mil a year ago (vs. 4.9% improvement for S&P 500)
How profitable is Crocs?
Crocs’ profit margins are higher than most companies in the Trefis coverage universe.
• Crocs’ Operating Income over the last four quarters was $1.0 Bil, which represents a moderate Operating Margin of 24.9% (vs. 13.1% for S&P 500)
• Crocs’ Operating Cash Flow (OCF) over this period was $992 Mil, pointing to a high OCF-to-Sales Ratio of 24.2% (vs. 15.7% for S&P 500)
Does Crocs look financially stable?
Crocs’ balance sheet looks weak.
• Crocs’ Debt figure was $1.7 Bil at the end of the most recent quarter, while its market capitalization is $5.2 Bil (as of 4/14/2025). This implies a moderate Debt-to-Equity Ratio of 30.9% (vs. 21.5% for S&P 500). [Note: A lower Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $180 Mil of the $4.8 Bil in Total Assets for Crocs. This yields a poor Cash-to-Assets Ratio of 3.8% (vs. 15.0% for S&P 500)
How resilient is CROX stock during a downturn?
CROX stock has fared much worse than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.
Inflation Shock (2022)
• CROX stock fell 73.9% from a high of $180.57 on 12 November 2021 to $47.21 on 17 June 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $159.68 on 17 June 2024 and currently trades at around $90
Covid Pandemic (2020)
• CROX stock fell 75.2% from a high of $43.40 on 9 January 2020 to $10.77 on 20 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 14 September 2020
Global Financial Crisis (2008)
• CROX stock fell 98.7% from a high of $74.75 on 31 October 2007 to $0.94 on 20 November 2008, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 11 January 2021
Putting all the pieces together: What it means for CROX stock
In summary, Crocs’ performance across the parameters detailed above are as follows:
• Growth: Strong
• Profitability: Strong
• Financial Stability: Weak
• Downturn Resilience: Extremely Weak
• Overall: Neutral
Although there are some risks associated with CROX stock, we think it is a good pick based on the above parameters.
While CROX looks promising, you could explore the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.
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