CROX
Crocs Inc
Consumer, Event Driven/Special Sit
01/20/2022
Presented
| Date | 01/13/2022 |
| Price | $125.87 |
| Market Cap | $7.41B |
| Ent Value | $9.54B |
| P/E Ratio | 10.92x |
| Book Value | $5.74 |
| Div Yield | 0% |
| Shares O/S | 58.85M |
| Ave Daily Vol | 1,724,781 |
| Short Int | 11.22% |
Current
| Price | $140.45 |
| Market Cap | $8.34B |
| Crocs, Inc. engages in the design, development, manufacturing, worldwide marketing, sale and distribution of casual footwear, apparel, and accessories for men, women, and children. It operates through the following segments: Americas, Asia Pacific and Europe, Middle East & Africa (EMEA). The Americas segment consists of the revenues and expenses related to product sales in North and South America. The Asia Pacific segment includes the revenues and expenses related to the product sales in Asia, Australia and New Zealand. The EMEA segment contains the revenues and expenses related to the product sales in Europe, Russia, Africa and the Middle East. The company was founded by Scott Seamans, George B. Boedecker, Jr. and Lyndon V. Hanson III in 2002 and is headquartered in Broomfield, CO. |
Publicly traded companies mentioned herein: Crocs Inc (CROX), Fila Holdings Corp (081660 KS), Hanesbrands Inc (HBI), Lululemon Athletica Inc (LULU)
Highlights
The presenter is long shares of Crocs Inc (CROX), the footwear company that primarily sells rubber clogs. The company and its products were very popular in the 2000s, and the company IPO’d in February 2006. The brand somewhat collapsed prior to the Financial Crisis, and the stock remained lazy until a few years ago when it started coming back into favor with some other previously popular brands (Champion, FILA, etc.), and ultimately became a major COVID beneficiary. At 12.5x consensus 2022 earnings, the stock is undervalued unless the growth stories behind the Crocs and Heydude brands are broken, which the presenter doesn’t believe to be the case, given the targets laid out by management for the Crocs brand - 17% CAGR through 2026 and EPS to CAGR at a 20%+ clip over that timeframe. Over the next 12 months, he expects CROX to delever and comp positively, which would set up the company to deliver ~$14 of EPS in 2023 (vs. the Street’s $12.26). At that level of earnings, the current share price would imply a ~9x valuation, whereas it has historically traded around 18x earnings. Assuming some continued momentum, he applies an 18x multiple in his base case, yielding a $252 price target. While some investors may argue that is too aggressive, a 15x multiple would still offer attractive upside.
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