Crocs (CROX), mcap=$4bn, price $65.99 vs $49.93

– The thesis is mostly based on Crocs not being a ‘fad’ and the company’s ability to at least partially sustain covid-driven revenue and margin gains.
– Consistent sales growth for 20 years, with only limited (-15%) drawdown during GFC.
– Increased scale permanently drove margins to higher levels due to strong operating leverage.
– Trades at only 5x PE on recently increased 2022 guidance.
– Large existing buyback authorization and history of large repurchases.

– Assuming $6.2bn revenues for 2026 (vs 2021 at $3.1bn including recently acquired Hey Dude) and 26% EBIT margins (way above 10% historically), results in $20/share of net income.
– At 15x multiple, that’s $300/share.

Exp. gain: +540% to $320/share.

Full $CROX write-up (free guest account required):

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