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

Last update: Jun 21, 2025

CROCS INC (NASDAQ:CROX) was identified as a decent value stock by our screening process. The company combines an attractive valuation with solid profitability, healthy financials, and reasonable growth prospects. Here’s why CROX may be worth a closer look for value investors.

Valuation

CROX appears undervalued compared to both its industry peers and the broader market. Key highlights from the fundamental report include:

A Price/Earnings (P/E) ratio of 7.50, significantly below the industry average of 32.07 and the S&P 500 average of 26.35.
A Price/Forward Earnings ratio of 7.25, also well below industry and market benchmarks.
An Enterprise Value to EBITDA ratio that ranks cheaper than 77% of its peers.
A Price/Free Cash Flow ratio that is more favorable than 85% of competitors.

These metrics suggest the stock is priced conservatively relative to its earnings and cash flow potential.

Profitability

CROX excels in profitability, with standout margins and returns:

Return on Assets (ROA) of 18.90%, outperforming 94% of industry peers.
Return on Equity (ROE) of 48.63%, ranking in the top 6% of its sector.
Operating Margin of 24.84%, better than 98% of competitors.
Profit Margin of 23.35%, the highest in its industry.

The company has consistently delivered positive earnings and cash flow over the past five years, reinforcing its financial strength.

Financial Health

Despite some liquidity concerns, CROX maintains a solid financial position:

Altman-Z score of 3.68, indicating low bankruptcy risk.
Debt to Free Cash Flow ratio of 1.68, meaning it could pay off debt in under two years using FCF.
Reduced debt levels compared to previous years.
Share buybacks have decreased outstanding shares over the past five years.

While the Current and Quick ratios are below industry averages, the company’s strong solvency and profitability mitigate liquidity risks.

Growth

Growth has slowed recently but remains respectable:

Revenue growth averaged 27.23% annually over the past five years, though recent growth was just 2.09%.
EPS grew 51.64% on average in prior years, with a modest 5.55% increase in the last year.
Future expectations suggest slower but stable growth in both revenue and earnings.

While not a high-growth stock, CROX offers stability alongside its undervaluation.

For a deeper look, review the full fundamental analysis of CROX.

Our Decent Value Stocks screener lists more stocks with strong valuations and fundamentals, updated daily.

Disclaimer

This is not investment advice. The observations here are based on data available at the time of writing. Always conduct your own research before making investment decisions.