I Was Wrong About This Small Cap Growth Stock | CROX Stock Analysis & Update

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Hi Everyone! I was wrong about this small cap growth stock. I posted a Crocs CROX stock analysis video a couple of week ago …

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38 Comments

  2. If you think about their core business, they are selling stamped shoes for a price of a pair of leather shoes. Imagine. Moreover, they upsell the clients with 5 bucks jibbits that cost a few cents best case, and eventually increase shoe prices. It's insane. The business is golden!

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  3. I agree they have a price moat. People have a different mentality when buying shoes. They view it as a one time purchase and don't mind spending a little more. THE food space is where people do not react well to price increase.

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  5. The croslite material is patented . Idk how easily a material similar enough could be made but what I do know is crocs are cheap and almost nobody would knowingly buy a crocs knockoff. I imagine this happens more often outside of the USA

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  10. I think their pricing power is limited, in fact they may be hitting the ceiling as we speak.

    As far as their brand moat is concerned, it's also not reliable – it's very much tied to this style of shoes being popular, when much of that popularity was ignited by the pandemic, therefore if this type of shoes ever loses their popularity, CROX will also go down w/ it.

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  14. Great video, on CROX press release from 17th Feb they say the rate on the Heydude aquisition debt will bear interest at SOFR (with a SOFR floor of 0.50%) plus 3.50%. What does this mean and how much interest will they pay each year total? Thanks!

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  16. I just started my position on Friday, crocs have been popular since I was kid. Very strong brand, only reason I’ve invested. Apparel is usually too hard because of fickle consumers. Crocs is fashion, utility, comfort. Nurses use them cause they’re washable, they’re great for picking up dog ish because of this too lol. Product is great, brand is great, stock is dirt cheap. No brainer in my book.

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  20. I agree that it has a brand moat, I have used cheap knock-offs, and they were clearly worse made. Furthermore, I would disagree about price moat, but only because I think of price moat differently in general. If you have a company and I have a company, and we compete directly, then when I lower my price, you follow and lower yours, but if I lower mine once again whereas you can not lower yours anymore because you would go bankrupt, that means that my company has a price moat (over your company). Not really applicable to Crocs (or Apple).
    I remembered Buffett's purchase of some shoe company which, he believed, had a moat. It turned out, its moat was no good against cheap Chinese shoes.
    Overall, I'm contemplating.

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  21. Justin…I would avoid this one. If you look at Berkshire’s 2007 annual letter, Buffett characterizes his purchase of Dexter shoe company as “the worst deal that I’ve ever made” . While Crox seemingly has a good product and good brand, long term it’s difficult for the moat to endure against low-cost competition.

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  26. at least IMO, CROX is absolutely undervalued. I am just not sure about the Hey Dude acq, but it is what it is, the company is still crazy undervalued. I already started baying it

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  28. Wouldn't moat, particularly in the clothing space, include a long term durability? If it's the current hot new product, you'd be able to raise prices, but that is would not necessarily mean durability. CROX didn't due too much until Covid. Kind of scary since the low valuation is based on a substantial earning blip after Covid. Debt looks high so what if earnings drop, wouldn't that be trouble?

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  30. I am rather new to stocks. I started last year. This is one of my biggest holdings. It went down with the hey dude acquisition while the overall market was still trending up. It has gone down ever since and of course after a decent earnings it’s continued it’s downtrend with the overall market. There expansions into Asia seems like it could be beneficial long term. And although I don’t see many hey dude shoes around it’s my understanding they are popular in costal towns!

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  33. Like GoPro as well. Only growing top line at like 6% but with software sales bottom line growing about 10%. Will have like 50% of current market cap in cash by end of year.

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  34. Agree, too cheap, even with conservative projections/multiples. One can argue they should trade at a premium with their 25%+ margins.
    There will be mean reversion and more.

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