Crocs, Inc. (CROX): A Bull Case Theory

We came across a bullish thesis on Crocs, Inc. on RM Capital Partnership’s Substack. In this article, we will summarize the bulls’ thesis on CROX. Crocs, Inc.'s share was trading at $84.03 as of October 21st. CROX’s trailing and forward P/E were 23.42 and 9.47 respectively according to Yahoo Finance.

Crocs, once a niche footwear brand, has become a cultural icon as casual and lifestyle shoes have grown to represent nearly 40% of the $85B global footwear market, projected to grow at a 4% CAGR. This shift from gyms to daily life has been driven by decades of cultural influence—from Run-DMC collaborations in the 1980s to athleisure in the 2010s—and accelerated by social media, where viral posts and kids’ early adoption normalize bold styles across work, school, and social settings. The brand’s signature molded clogs, functional yet instantly recognizable, exemplify this trend, with personalization options like Jibbitz charms reinforcing identity signaling.

The broader casual/lifestyle segment, worth ~$34B and growing 4–5% annually, remains labor-intensive in production, concentrated in Southeast Asia, but benefits from incremental innovations in comfort materials and sourcing diversification. Sales channels shape economics: wholesale accounts for ~55% of volume with lower margins, DTC grows fastest with higher margins and direct consumer data, and marketplaces provide scale but less brand control. Across occasions, relaxed dress norms have blurred traditional footwear categories, allowing Crocs to capitalize on manufacturing flexibility and cultural momentum over technical performance.

Crocs lead in molded clogs with 70–85% U.S. share, leveraging brand strength and collaborations to drive full-price sell-through, while HeyDude, acquired in 2022, contributes ~20% of revenue with lower margins and heavier wholesale reliance. Core Crocs revenue, ~80% of total (~$3.28B in 2024), benefits from scalable manufacturing and high operating margins in the high-20s%. The company remains heavily U.S.-focused, with international expansion representing a white space opportunity. With a dominant position in clogs, steady DTC growth, and cultural resonance driving adoption across ages and occasions, Crocs is well-positioned to continue capturing share in the growing lifestyle footwear market.

Previously we covered a bullish thesis on Crocs, Inc. (CROX) by Taylor Nichols in April 2025, which highlighted the company’s strong financials, strategic capital allocation, and growth potential in its core Crocs brand and HEYDUDE acquisition. The stock has depreciated ~6% since coverage. The thesis still stands as CROX maintains high margins and free cash flow. RM Capital Partnership shares a similar view but emphasizes cultural relevance and lifestyle adoption as growth drivers.

Crocs, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held CROX at the end of the second quarter which was 36 in the previous quarter. While we acknowledge the potential of CROX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.