How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Crocs (CROX) ten years ago? It may not have been easy to hold on to CROX for all that time, but if you did, how much would your investment be worth today?
Crocs' Business In-Depth
With that in mind, let's take a look at Crocs' main business drivers.
Founded in 1999 and based in Niwot, CO, Crocs, Inc. is one of the leading footwear brands with its focus on comfort and style. Famous for its iconic clog material, Crocs’ simple design and great comfort was an instant hit among consumers. The company offers a wide variety of footwear products including sandals, wedges, flips and slide that cater to people of all age.
Most of the company’s shoes are made up of Croslite, which comes with qualities including soft, comfortable, lightweight, non-marking and odor-resistant. Its other iconic product “The Classic Clog” for adults and children offers all-day comfort. It is now using the Croslite technology in its LiteRide collection, which features proprietary foam and is soft, lightweight and resilient.
The company operates in three geographic regions:
Americas (69.5% of FY21 Revenues): This includes the United States, Canada and Puerto Rico.
Asia Pacific (15.1% of FY21 Revenues): This includes Korea, China, Japan, Singapore, Australia and Hong Kong.
EMEA (15.4% of FY21 Revenues): This includes Russia, Germany, France, Austria, and The Netherlands.
Crocs’ products are available in more than 80 countries and are distributed via wholesale, retail, and e-commerce platforms. The wholesale channel consists of domestic and international multi-brand retailers, e-tailers, and distributors while the retail channel includes company-operated stores. Lastly, websites and third-party marketplaces form its e-commerce operations.
Moreover, Crocs has entered into licensing partnerships with Disney, including Marvel and Lucasfilm, Universal Studios, Nintendo, and Warner Bros, which further enhances its reach and popularity. As of Sep 30, 2022, Crocs had 353 company-operated stores — 178 in the Americas, 153 in the Asia Pacific and 22 in EMEALA.
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Crocs a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in December 2012 would be worth $7,375.19, or a gain of 637.52%, as of December 6, 2022, and this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 183.75% and gold's return of -0.07% over the same time frame.
Going forward, analysts are expecting more upside for CROX.
Shares of Crocs have outpaced the industry in the past three months. The stock’s bullish run on the bourses can be attributable to robust third-quarter 2022 results. The company’s top and bottom lines surpassed the Zacks Consensus Estimate for the 10th straight quarter in the third quarter. Also, sales and earnings improved year over year. Solid consumer demand, particularly in the back-to-school season, as well as strength in the Crocs and HEYDUDE brands, contributed to the quarterly results. Robust growth across all regions and customer acquisitions aided digital sales. Potential gains from the HEYDUDE buyout bode well. Consequently, management raised the 2022 view. However, the company has been witnessing high inflation and higher air freight and logistics costs. Also, dismal margins and rising SG&A expenses remain concerning.
Shares have gained 22% over the past four weeks and there have been 5 higher earnings estimate revisions for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
Want 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