Jul 8, 2022
[4 min Read]
You are probably aware that Crocs, Inc. (NASDAQ: CROX) is a leader in the Footwear & Accessories space. In this analysis, we are going to look at some of the key financial ratios for Crocs, Inc. to determine a price prediction for CROX. Remember these price predictions take into account several assumptions (which I will highlight) to determine a future price. I'll share my CROX stock price prediction, then show you the approach and assumptions used to calculate the CROX stock forecast.
Before we go any further, let me start by saying this, stock forecasting is hard. I don't know what the future will hold, and neither do Wall Street Analysts. If they could accurately predict the future, they would be able to beat the S&P 500 and I would be extremely wealthy. What I can say is that we can use available data to determine a reasonable CROX stock forecast and helps us make better investment decisions, so hopefully, you find this analysis useful.
The Crocs, Inc. stock price prediction of $85.66 was derived from 2 main valuation methods (which are averaged for the final price target you see above). I'll dive into the approach to show you how I determined how I “predicted” a stock price of $85.66 for CROX.
The Financial growth Metrics provide an analytics valuation approach to determining a reasonable CROX stock forecast. The comparable companies' analysis determines CROX's stock forecast by comparing CROX's financial ratios to the average financial ratios of a group of similar stocks.
For this part of the analysis, I am looking at the history of key financial metrics for Crocs, Inc. to forecast the stock into 2022 and 2025. Most investors know that historical performance does not guarantee future performance, but it is useful to see how CROX has been trending.
CROX's Estimated Earnings Per Share in 2023 is 11.93 and is projected to grow at a CAGR of 10% through 2025. Using this information, we can forecast CROX's EPS in 2025 to be 14.44. Furthermore, CROX's Forward Price to Earnings Ratio is 6. Using all of this information, we can determine a CROX stock forecast for 2025 by multiplying the P/E by the EPS to give us a stock price prediction of $86.64 per share
There are other ways to predict the price for CROX but I would argue that P/E, EPS, and Earnings Growth are the most commonly used financial metrics by analysts and investors. This is why I used them to forecast CROX's stock price.
In order to undergo a comparable analysis, we need to outline CROX's main competitors. These competitors need to have; a stock, valid financial ratios, operations similar to CROX, and a market cap similar to CROX (if possible).
By keeping this in mind, I found the following list of companies to be some of CROX stocks' closest competitors:
Overall, CROX stock is undervalued and needs to experience a change in the stock price of (an average of) 45.73% to be considered “at fair value”. Applying this percentage change to CROX's current price of $58.11 implies a forecasted price of $84.68
Analyst Ratings have provided a relatively strong indicator of future price movement, which is why they are used to (hopefully) support our CROX stock forecast. There are a total of 23 analyst ratings for CROX, which are distributed as follows:
Overall, the vast majority of analysts are bullish on the CROX stock and have given it a "buy" rating. Furthermore, all of the other analysts have given the CROX stock a "hold" rating. This is very good to see as all of the analysts are in consensus on the fact that the CROX stock is either at or below its fair market value.
Should you buy CROX? Well, based on the overall CROX stock forecast of $85.66 per share, and the current price of CROX being $58.11, I would agree with the analysts and say CROX is a buy. Let me know what you think, happy to dive into other aspects of CROX to help you make an informed investment decision.