Is it too late to consider buying Crocs, Inc. (NASDAQ: CROX)?

Crocs, Inc. (NASDAQ: CROX) isn’t the biggest company on the market, but it has received a lot of attention due to a substantial price increase on the NASDAQGS over the past few months. The company’s trading levels have reached their highest level in the last year, following the recent rebound in the share price. Since many analysts cover mid-cap stocks, we would expect any price-sensitive announcements to have already been factored into the stock price. However, could the stock still be trading at a relatively cheap price? Let’s take a closer look at Crocs’ valuation and outlook to determine if there’s still a bargain opportunity.

Check out our latest analysis for Crocs

Are Crocs still cheap?

Great news for investors: Crocs is still trading at a fairly cheap price according to our price multiples model, in which we compare the company’s price-to-earnings ratio to the industry average. In this case, we used the price-to-earnings (PE) ratio because there is not enough information to reliably forecast the stock’s cash flows. we see that Crocs’ ratio of 12.01x is lower than its peer average of 19.19x, indicating that the stock is trading at a lower price than the luxury sector. However, given that Crocs stock is quite volatile (meaning its price movements are magnified relative to the rest of the market), this could mean that the price can fall, giving us another chance to ‘buy in the future. This is based on its high beta, which is a good indicator of stock price volatility.

What does the future of Crocs look like?

Future outlook is an important aspect when considering buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors argue that it’s the intrinsic value relative to the price that matters most, a more compelling investment thesis would be high growth potential at a cheap price. Crocs’ earnings growth is expected to be around 10% in the coming years, which suggests a strong future. This should lead to robust cash flows, fueling a higher stock value.

What this means for you

Are you a shareholder? Given that CROX is currently below the industry PE ratio, now may be a great time to increase your stock holdings. With a positive outlook on the horizon, it appears this growth has yet to be fully priced into the stock price. However, other factors should also be considered, such as capital structure, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on CROX for a while, now might be the time to take the plunge. Its optimistic future earnings outlook is not yet fully reflected in the current stock price, meaning it’s not too late to buy CROX. But before making any investment decision, consider other factors such as the strength of its balance sheet, in order to make an informed assessment.

So if you want to dig deeper into this stock, it’s crucial to consider the risks it faces. For example, we discovered 2 warning signs which you should take a look at to get a better picture of Crocs.

If you are no longer interested in Crocs, you can use our free platform to view our list of over 50 other stocks with high growth potential.

Any feedback on this article? Worried about the content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to constitute financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your objectives or your financial situation. Our goal is to provide you with targeted, long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.