CROCS INC (NASDAQ:CROX) – A Potentially Undervalued Stock with Strong Fundamentals

CROCS INC (NASDAQ:CROX) stands out as a compelling candidate for value investors, according to our fundamental screening criteria. The company combines an attractive valuation with solid profitability, healthy financials, and reasonable growth potential. Below, we break down why CROX may be worth a closer look.

Valuation

CROX appears undervalued based on several key metrics:

• P/E Ratio: At 7.91, it is significantly lower than both the industry average (81.08) and the S&P500 (26.19).
• Forward P/E: 7.65, suggesting continued earnings strength.
• Price/Free Cash Flow: The ratio is favorable compared to 83% of industry peers.
• Enterprise Value/EBITDA: Also below most competitors, reinforcing its cheap valuation.

Profitability

The company excels in profitability, with strong margins and returns:

• Profit Margin: 23.35%, outperforming nearly 98% of its industry.
• Operating Margin: 24.84%, ranking in the top 6% of the sector.
• ROE & ROIC: Exceptional returns on equity (48.63%) and invested capital (21.12%) highlight efficient capital use.

Financial Health

CROX maintains a stable financial position:

• Debt Management: A manageable Debt/Equity ratio (0.75) and strong free cash flow coverage (Debt/FCF at 1.68).
• Solvency: An Altman-Z score of 3.72 indicates low bankruptcy risk.
• Share Buybacks: The company has reduced shares outstanding over the past five years, signaling confidence in its business.

Growth

While growth has slowed recently, historical performance remains strong:

• Revenue Growth: Averaged 27.23% annually over the past five years.
• EPS Growth: Increased by 51.64% yearly in the same period.
• Future Expectations: Modest projected growth in revenue (3.08%) and EPS (3.74%).

For a deeper dive into CROX’s fundamentals, review the full analysis report.

Our Decent Value screener lists more stocks with similar characteristics and is updated daily.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should always conduct your own analysis before making investment decisions.