Ricardo Pillai
3 min read
In This Article:
We came across a bullish thesis on Crocs, Inc. (CROX) on The Finance Corner’s Substack by Kostadin Ristovski. In this article, we will summarize the bulls’ thesis on CROX. Crocs, Inc. (CROX)'s share was trading at $100.17 as of 5th June. CROX’s trailing and forward P/E were 6.18 and 8.61 respectively according to Yahoo Finance.
andersphoto / Shutterstock.com
Crocs, founded in 2002, has carved out a unique space in the footwear industry with its polarizing design and proprietary Croslite material, offering comfort, lightness, and odor resistance. While its classic clogs and sandals are not inherently exciting, the company has driven engagement through personalization, celebrity partnerships, and Jibbitz accessories—turning its products into cult items especially among Gen Z. The brand saw an unexpected surge during the pandemic, as demand for comfortable, at-home footwear soared, propelling revenue and pushing its stock price from $11 to $180 in just over a year.
Recognizing the temporary nature of this boom, management sought to diversify with the acquisition of HEYDUDE for $2.5 billion—a move initially criticized by the market. While HEYDUDE added lightweight, casual loafers to the portfolio and aimed for $1B in revenue by 2024, it fell short at $824M, validating some investor scepticism. However, CEO Andrew Rees has demonstrated strategic discipline, notably through an earlier rationalization that saw a 40% reduction in Crocs stores.
Today, the company generates ~$900M in annual free cash flow, focusing on deleveraging and aggressive share buybacks, having reduced shares outstanding by 7% in 2024 alone. Still, questions persist: Is Crocs a lasting brand or a fashion fad? Bear, base, and bull valuation cases suggest fair values between $76 and $143 per share, hinging on this very question.
Encouragingly, international markets grew 42% over two years while North America stagnated, and global manufacturing diversification gives Crocs strategic flexibility. At a $5.5B market cap, the company offers attractive upside—if it avoids missteps and remains culturally relevant.
Previously, we covered a bullish thesis on Crocs (CROX) by Taylor Nichols, which aligns with Kostadin Ristovski’s take. Since then, the stock has seen an 11% appreciation in price. Both highlight strong cash flow, high margins, and smart capital allocation. Nichols emphasizes valuation upside and financial strength, while Ristovski focuses on brand relevance and international growth. Together, they make a compelling bull case from both quantitative and qualitative angles.
