Crocs‘ (NASDAQ: CROX) shares are down 18% in 2025, underperforming the S&P 500’s 8% decline, as uneven brand performance has dampened investor confidence. The flagship Crocs Brand remains solid, posting 9% revenue growth in 2024 and contributing 80% of overall sales, whereas the $2.5 billion HeyDude acquisition continues to lag, with revenue down 13%. Still, Crocs achieved an impressive 20%+ adjusted operating margin in Q4, outperforming rivals such as Nike(NYSE: NKE). Yet, the stock trades at only 6x forward earnings, indicating possible undervaluation.
The company is also contending with external challenges from evolving U.S. trade policies. Roughly 50% of Crocs’ production takes place in Vietnam, which recently secured a 90-day reprieve from proposed 46% tariffs. Crocs also works with third-party manufacturers in China, where tariffs have jumped to 145%. Although these factors may weigh on margins, their effect appears manageable, given the company’s continued investments in digital capabilities and international growth.
At around $90, the stock appears to be a solid choice. However, some concerns remain with CROX stock, adding risk despite its currently modest valuation. We reach this conclusion by evaluating the company’s present valuation relative to its historical and recent operating performance and financial standing. Our Crocs analysis focuses on four key areas—Growth, Profitability, Financial Stability, and Downturn Resilience—as outlined below.
How does Crocs’ valuation compare to the S&P 500?
Measured by multiples of sales or profits, CROX stock appears inexpensive relative to the broader market.
• Crocs’ price-to-sales (P/S) ratio is 1.3 compared to 2.8 for the S&P 500
• Its price-to-operating income (P/EBIT) ratio stands at 5.4 versus 21.3 for the S&P 500
• Its price-to-earnings (P/E) ratio is 5.8 compared to the S&P 500’s 21.3
How has Crocs’ revenue trended in recent years?
Crocs’ Revenues have exhibited modest growth in recent years.
• Crocs’ revenue grew at an average annual rate of 22.9% over the past three years (compared to 6.2% for the S&P 500)
• Revenues increased 3.5% from $4.0 billion to $4.1 billion in the last 12 months (vs. 5.3% growth for the S&P 500)
• Quarterly revenue rose 3.1% to $990 million from $960 million a year earlier (vs. 4.9% growth for the S&P 500)
How profitable is Crocs?
Crocs’ margins are above average compared to most companies in the Trefis universe.
• Operating income over the past year was $1.0 billion, reflecting a healthy margin of 24.9% (vs. 13.1% for the S&P 500)
• Operating cash flow came in at $992 million, with a high OCF-to-Sales ratio of 24.2% (vs. 15.7% for the S&P 500)
Is Crocs financially stable?
The company’s balance sheet appears relatively weak.
• Crocs’ debt totaled $1.7 billion at the end of the last quarter, with a market cap of $5.2 billion (as of 4/14/2025), translating to a moderate Debt-to-Equity ratio of 30.9% (vs. 21.5% for the S&P 500)
• Cash and equivalents amounted to $180 million out of $4.8 billion in total assets, yielding a low Cash-to-Assets ratio of 3.8% (vs. 15.0% for the S&P 500)
How resilient is CROX stock in downturns?
CROX stock has underperformed the S&P 500 during recent market sell-offs. While hopes remain for a soft economic landing, here’s how the stock fared in past recessions, based on our dashboard How Low Can Stocks Go During A Market Crash, which tracks performance across six major market crashes.
Inflation Shock (2022)
• CROX stock dropped 73.9% from $180.57 (11/12/2021) to $47.21 (6/17/2022), vs. a 25.4% decline for the S&P 500
• The stock has not yet regained its pre-crisis high
• Its post-crisis peak was $159.68 on 6/17/2024; it currently trades around $90
Covid Pandemic (2020)
• CROX stock fell 75.2% from $43.40 (1/9/2020) to $10.77 (3/20/2020), vs. a 33.9% S&P 500 drop
• The stock fully recovered by 9/14/2020
Global Financial Crisis (2008)
• CROX stock plunged 98.7% from $74.75 (10/31/2007) to $0.94 (11/20/2008), vs. a 56.8% decline in the S&P 500
• The stock fully recovered by 1/11/2021
Putting it all together: What it means for CROX stock
In summary, Crocs’ performance across major dimensions is:
• Growth: Strong
• Profitability: Strong
• Financial Stability: Weak
• Downturn Resilience: Extremely Weak
• Overall: Neutral
Despite some risks, CROX stock appears to be a worthwhile option based on the outlined metrics.
For broader investment ideas, consider the Trefis Reinforced Value Portfolio, which has consistently outperformed a composite benchmark of large-, mid-, and small-cap indices. Why does it work? This quarterly rebalanced portfolio captures upside potential while mitigating downside risk, as detailed in its performance metrics.
Invest with Trefis
Market Beating Portfolios | Rules-Based Wealth
Read the full article here
