On Tuesday, Williams Trading adjusted its stance on Crocs , Inc. (NASDAQ:CROX), downgrading the stock from Buy to Hold and lowering the price target to $125 from the previous $135.
The shift in rating follows recent checks by the firm, which suggest that while Crocs' operations are on track or slightly better than planned, the sales of HEYDUDE – a brand under the Crocs umbrella – are not strong enough to anticipate a year-over-year increase for 2024.
The downgrade comes amidst news that HEYDUDE President Rick Blackshaw has resigned effective immediately. In his stead, Terence Reilly, the present President of Stanley 1913, and former Senior Vice President & Chief Marketing Officer at Crocs, will take on the role of Executive Vice President & President of HEYDUDE starting April 29th.
Reilly's past success at Stanley and his fit within the Crocs culture are noted, but expectations are tempered with the understanding that it may take some time for HEYDUDE to regain its momentum.
The report from Williams Trading indicates that the prospects for Crocs' stock are tied closely to the performance of HEYDUDE. The firm suggests that it is challenging for Crocs' shares to gain traction without evidence of sustainable growth in HEYDUDE sales.
Investors and market watchers can expect to see Crocs' first-quarter earnings for 2024 on the morning of May 7th. This upcoming earnings report may provide further insight into the company's financial health and the potential impact of the leadership changes within HEYDUDE on Crocs' overall performance.
InvestingPro Insights
In light of the recent downgrade of Crocs, Inc. (NASDAQ:CROX) by Williams Trading, investors may find additional context in real-time data and expert analysis. According to InvestingPro data, Crocs boasts a market capitalization of $7.32 billion and is trading at a P/E ratio of 9.38, which suggests the stock is potentially undervalued when considering its near-term earnings growth. The company's strong revenue growth of 11.46% over the last twelve months further underscores its financial performance. Additionally, Crocs has demonstrated a robust gross profit margin of 55.78%, highlighting the company's efficiency in managing its cost of goods sold.
InvestingPro Tips reveal that Crocs has been experiencing significant stock price volatility, which could be a point of consideration for investors seeking stable returns. Despite this, the company has shown a strong return over the last three months, with a price total return of 31.77%. Moreover, analysts predict Crocs will be profitable this year, having already been profitable over the last twelve months. Notably, Crocs does not pay a dividend, which might influence investment decisions for those seeking regular income streams.
For investors seeking a more comprehensive analysis, there are an additional 6 InvestingPro Tips available for Crocs, which can be accessed at https://www.investing.com/pro/CROX. To enhance your investment research experience, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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