On Tuesday, UBS adjusted its price target on Crocs (NASDAQ:CROX) shares, listed on NASDAQ:CROX, to $146.00, a slight decrease from the previous $148.00, while maintaining a Neutral rating on the stock.
The firm's analysis indicates that while Crocs and HEYDUDE brands are performing satisfactorily in the U.S. market, Crocs' international sales are likely showing stronger results. Additionally, HEYDUDE's international performance might help balance some pressures experienced in North America's direct-to-consumer segment.
UBS expects Crocs to report a modest second-quarter earnings per share (EPS) beat. This anticipated performance is based on current sales trends, both domestically and internationally. The firm anticipates that Crocs will provide guidance for the third quarter of 2024 that aligns with the consensus and will be able to maintain its full-year 2024 EPS forecast.
According to UBS, the forthcoming financial report is likely to meet market expectations, which would result in minimal movement in the company's price-to-earnings (P/E) ratio.
The options market is currently anticipating a potential price change of plus or minus 3.8% in response to the earnings report. This is a notable deviation from the average historical movement of 10.0% typically seen after such announcements.
In other recent news, Crocs Inc. has been making notable strides in the footwear industry. The company's first-quarter financial results exceeded expectations, with a 7% year-over-year increase in revenue to $939 million, largely driven by a 16% surge in the Crocs brand revenue.
Adjusted earnings per share rose by 16% to $3.02, while the adjusted gross margin improved to 56%. However, the HEYDUDE brand, also owned by Crocs, experienced a 17% revenue drop.
Analysts from various firms have weighed in on these recent developments. Baird has upgraded Crocs' share price target to $190 from $160, maintaining an Outperform rating. The firm expressed confidence in the second half of the year, suggesting potential for positive surprises in the coming quarters.
UBS, on the other hand, increased its price target for Crocs to $148 from $124, maintaining a neutral stance. The firm's outlook could change if Crocs demonstrates potential to significantly exceed market earnings expectations.
The company's robust growth in core business operations, expansion into new product categories and markets, and strong brand resonance and customer loyalty have been noted as strengths.
However, challenges within the HEYDUDE brand and risks associated with manufacturing concentration and long lead times are seen as weaknesses. These are recent developments that potential investors in Crocs may want to consider.
InvestingPro Insights
As Crocs Inc. (NASDAQ:CROX) approaches its next earnings date on July 18, 2024, the market is closely monitoring its performance. According to InvestingPro data, Crocs currently boasts a market capitalization of approximately $8.25 billion and operates with a P/E ratio of 10.01, reflecting investor sentiment on its value relative to earnings. The company's revenue growth has been steady, with a 6.29% increase over the last twelve months as of Q1 2024, and a gross profit margin of 56.16%, highlighting its ability to maintain profitability.
An InvestingPro Tip notes that Crocs has a perfect Piotroski Score of 9, suggesting a strong financial position. Additionally, the company's stock is trading at a low P/E ratio relative to near-term earnings growth, which may appeal to value investors. With 7 analysts having revised their earnings upwards for the upcoming period, the outlook appears optimistic. For those seeking comprehensive analysis, InvestingPro offers additional insights—there are 13 more InvestingPro Tips available for Crocs, which can be accessed through their platform. For readers interested in a deeper dive into the financials and prospects of Crocs, consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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