Crocs Stock Trades at a Bargain: Is It Time to Buy or Step Back?

Crocs, Inc. CROX is currently trading at a compelling discount relative to the industry and the broader market. CROX stock trades at a forward 12-month price-to-earnings (P/E) ratio of 7.50X, significantly lower than the industry’s average of 20.17X.CROX Stock's Valuation Image Source: Zacks Investment ResearchWhile the low P/E may appear attractive to value-oriented investors, it also signals caution, possibly due to slowing growth, post-pandemic normalization or concerns around brand strength. Shares of CROX have lost 9% year to date, while the Consumer Discretionary sector and the S&P 500 have posted gains of 7.5% and 2.9%, respectively. However, CROX has outperformed its industry, which has seen a steeper decline of 26.5% over the same period.CROX Stock Price PerformanceImage Source: Zacks Investment ResearchClosing yesterday’s trading session at $98.64, CROX stands about 34.7% below its 52-week high of $151.1. The stock also trades below its 50- and 200-day simple moving averages, signaling continued downward momentum. This technical setup reflects cautious investor sentiment and a lack of near-term catalysts.Crocs’ Strong Fundamentals Amid ChallengesCrocs continues to demonstrate resilience through solid consumer demand across its diverse brand portfolio. The company has seen consistent growth, with key contributions from both its clogs and sandals categories. The iconic Classic Clog remains a strong performer, complemented by established lines like Echo and newer introductions such as InMotion. Crocs is also expanding its offerings beyond clogs, focusing on products suited for new wearing occasions to drive broader appeal.The sandals category has become a standout, delivering impressive market share gains. Within this segment, the Style Sandals lineup has shown strength, outperforming even the core clogs business. Franchises like Getaway, Brooklyn and Miami are driving momentum, supported by strong sell-through rates across the board. Management views the sandals category as a gateway to attracting new consumers and strengthening brand reach globally.Crocs’ focus on innovation, global expansion and direct-to-consumer strength positions it well for long-term growth. As the company continues to diversify its product mix and broaden its consumer base, it remains a compelling player in the footwear space. International performance continues to be a strong growth engine for Crocs. In the first quarter of 2025, the company saw double-digit growth in global markets, with China standing out as a key contributor.A major drag on Crocs' performance is the underwhelming results from its HEYDUDE brand, which saw first-quarter fiscal 2025 revenues fall nearly 10% year over year. The drop was caused by weak wholesale sales, offsetting modest DTC growth. HEYDUDE’s reliance on China-based sourcing also makes it especially vulnerable to upcoming tariffs, which management warns will begin squeezing gross margins in the fiscal second quarter, with a deeper impact expected in the second half.How Should You Approach CROX Stock?Crocs stock looks attractively valued, but much of that is due to its sharp price decline in 2025. The company is making progress through strong brand innovation, expansion in international markets and continued consumer demand for both clogs and sandals. However, the underwhelming performance of the HEYDUDE brand, rising SG&A expenses and macroeconomic uncertainty, particularly tariffs, pose significant risks to profitability, hurting investor confidence. Those already holding CROX may consider staying invested, driven by its long-term potential. The company currently carries a Zacks Rank #3 (Hold).Key PicksSome better-ranked stocks in the same space are Duluth Holdings DLTH, The Marcus MCS and Atour Lifestyle Holdings Limited ATAT.Duluth Holdings carries a Zacks Rank #2 (Buy) at present. DLTH has a negative trailing four-quarter earnings surprise of 21%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for DLTH’s 2025 earnings per share (EPS) indicates an increase of 18.3% from the year-ago level.The Marcus carries a Zacks Rank of 2 at present. MCS has a negative trailing four-quarter earnings surprise of 145.7%, on average.The Zacks Consensus Estimate for MCS’ 2025 sales indicates an increase of 5.2% from the year-ago level.Atour Lifestyle currently carries a Zacks Rank of 2. The company has a trailing four-quarter earnings surprise of 3.9%, on average. The Zacks Consensus Estimate for ATAT’s 2025 sales and EPS indicates an increase of 30.5% and 24%, respectively, from the year-ago levels.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Marcus Corporation (The) (MCS): Free Stock Analysis Report Crocs, Inc. (CROX): Free Stock Analysis Report Duluth Holdings Inc. (DLTH): Free Stock Analysis Report Atour Lifestyle Holdings Limited Sponsored ADR (ATAT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks