The broader market is currently experiencing a significant downturn, with a 5% fall in the S&P 500 yesterday followed by another 4% decline today. This negative market reaction is attributed to President Donald Trump’s recent announcement of sweeping tariffs on goods from over 100 countries. These tariffs have sparked concerns about a potential trade war, which could reignite inflation and negatively impact the broader U.S. economy and consumer spending. Further details on the potential impact of these tariffs on market crash risk can be found in our analysis.
Amidst this broader market weakness, Crocs (NASDAQ:CROX) stock appears to be an attractive opportunity. Recent discussions between President Trump and the President of Vietnam regarding a potential bilateral agreement, which could eliminate tariffs, are likely benefiting Crocs and Nike stocks. This potential tariff reduction, leading to lower costs, and coupled with Crocs’ strong profitability (as discussed below), is a probable driver of the recent spike in their stock price.
While it’s true that CROX carries some risks, particularly its historical weak resilience to market downturns, these concerns seem to be already well-captured in its currently cheap valuation. With strong underlying fundamentals, including solid revenue growth and profitability, CROX presents a compelling case for investors. Our analysis, which compares CROX stock’s current valuation against its recent operating performance and current and historical financial condition, suggests that the current low price offers a potentially attractive entry point, especially considering the company’s fundamental strengths. However, for investors who seek lower volatility than individual stocks, the Trefis High-Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.
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 1.4 vs. a figure of 3.2 for the S&P 500
- Additionally, the company’s price-to-operating income (P/EBIT) ratio is 5.6 compared to 24.3 for S&P 500
- And, it has a price-to-earnings (P/E) ratio of 5.8 vs. the benchmark’s 24.3
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 6.3% for S&P 500)
- Its revenues have grown 3.5% from $4.0 Bil to $4.1 Bil in the last 12 months (vs. growth of 5.2% 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. 5.0% improvement for S&P 500)
How Profitable Is Crocs?
Crocs’ profit margins are much higher than most companies in the Trefis coverage universe.
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 $5.5 Bil (as of 4/3/2025). This implies a moderate Debt-to-Equity Ratio of 29.7% (vs. 19.0% 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. 14.8% 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. Worried about the impact of a market crash on CROX stock? Our dashboard How Low Can Crocs Stock Go In A Market Crash? has a detailed analysis of how the stock performed during and after previous 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 $96
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: Very Strong
- Financial Stability: Weak
- Downturn Resilience: Extremely Weak
- Overall: Neutral
While our analysis across the above parameters indicates moderate overall performance for CROX stock, its strong profitability coupled with its current low valuation makes it an attractive investment opportunity, ultimately supporting our conclusion that CROX is a good stock to buy.
While CROX stock looks promising, investing in a single stock can be risky. On the other hand, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.
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