Tuesday's IBD 50 Stocks To Watch pick, Crocs, is among the best stocks to buy and watch as it breaks out past its latest buy point. Quarterly earnings results are due out in late April. CROX stock rallied 3% Tuesday midday.
Broomfield, Colo.-based Crocs is best known for its rubbery, casual-wear shoes. The company in recent years expanded its Crocs brand portfolio from the classic slip-on clogs to include boots, sandals, wedges and sneakers. The Crocs brand makes up around 75% of sales. The company's Heydude brand of suede, leather and canvas comfort shoes comprise 25% of revenue.
On Feb. 16, Crocs shares jumped 4.4% after the shoemaker topped Q4 revenue views early Thursday and reported an optimistic 2023 outlook, with profits exceeding analysts' consensus views.
For the fourth quarter, Crocs said earnings grew 23% to $2.65 per share as revenue increased 61% to $945 million. Those numbers easily cleared analyst targets of $2.26 and $939.26 million, respectively
For the full year, Crocs earnings advanced 31% to $10.92 per share while sales edged up 54% to $3.55 billion.
Crocs' first-quarter earnings results are due April 27. Wall Street expects $2.17 per share on revenue of $852.8 million, which would translate into 6% and 29% growth.
Crocs Impressive Earnings Record
This footwear leader has a nearly perfect 98 Earnings-Per-Share Rating, according to IBD Stock Checkup. This metric takes into account growth and stability of earnings over the past three years, with the two most recent quarters weighed more heavily.
Crocs also has an impressive long-term earnings track record, with a stellar 122% five-year growth rate. This positively impacts the EPS Rating, which reflects an average of 21% earnings growth in the latest two quarters. Annual earnings are expected to rise 3% in 2023 and an additional 14% in 2024, according to FactSet.
As for the SMR Rating — which looks at sales, profit margins and return on equity — Crocs has a strong A rating. In the latest year, it booked a strong 24% pretax margin, with a great 163% return on equity. And over the last three quarters, Crocs has grown sales by an average 56%.
Finally, CROX stock boasts a perfect 99 IBD Composite Rating. This proprietary metric is designed to help investors easily measure the quality of a stock's fundamental and technical metrics.
Best Stocks To Buy And Watch: Crocs Breaks Out Past Buy Point
Crocs shares rallied 3% Tuesday, breaking out past a cup base's 143.60 buy point, according to IBD MarketSmith. The 5% buy range goes up to 150.78.
Bullishly, the relative strength line hit a new high Tuesday, resulting in the blue dot. The designation, which appears in an IBD MarketSmith screen, focuses on market-beating performance. These unique issues could be big winners amid the ongoing confirmed uptrend in stocks.
Fellow footwear leader On remains sharply extended past a 21.21 buy point in a cup with handle. On is an IBD Leaderboard stock.
Best Stocks To Buy And Watch
These are three recent IBD 50 Stocks To Watch picks.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| InMode | 41.94 | Cup base | |
| Lululemon Athletica | 371.36 | Cup with handle | |
| PulteGroup | 59.34 | Cup with handle |
Source: IBD Data As Of April 18, 2023
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on the best stocks to buy and watch and the stock market.
