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

We came across a bullish thesis on Crocs, Inc. on Favona Hathaway Substack’s Substack by Favona Hathaway. In this article, we will summarize the bulls’ thesis on CROX. Crocs, Inc.'s share was trading at $84.98 as of November 28th. CROX’s trailing and forward P/E were 29.51 and 7.72 respectively according to Yahoo Finance.

Crocs, Inc., together with its subsidiaries, designs, develops, manufactures, markets, distributes, and sells casual lifestyle footwear and accessories for men, women, and children under the Crocs and HEYDUDE Brands in the United States and internationally. CROX has evolved from a niche rubber clog maker into a global footwear brand known for its quirky, comfortable, and customizable products. The brand’s unique appeal spans generations, from practical footwear for adults to trendy festival wear for younger consumers.

Since its 2002 launch, Crocs has expanded its product line into slides, sandals, and sneakers while maintaining its core appeal of lightweight, comfortable, and fun-to-personalize footwear. The investment case for Crocs is strengthened by its current valuation. In Q2 2025, the company reported a GAAP net loss of $492 million, largely due to non-cash accounting charges from the HEYDUDE acquisition, including $430 million in trademark impairment and $307 million in goodwill impairment. Stripping these out, Crocs generated $244.7 million in real net income during the quarter and nearly $974 million in adjusted profits over the past year, implying a P/E of just 4.7x against its $4.56 billion market capitalization.

Crocs also boasts superior financial metrics compared to peers, including high margins, ROIC, and EBIT, supported by a robust direct-to-consumer model that drives ~60% gross margins and benefits from strong customer loyalty. International expansion is offsetting U.S. saturation, with China and India leading growth, and management has actively returned capital through buybacks while reducing debt.

Beyond the numbers, Crocs enjoys enduring cultural relevance, demonstrating genuine consumer affinity and product stickiness. With strong profitability, accelerating international growth, debt reduction, and undervaluation relative to peers, Crocs presents a compelling opportunity with the potential to double in value, making it a highly attractive investment at current levels.

Previously we covered a bullish thesis on Crocs, Inc. (CROX) by Taylor Nichols in April 2025, which highlighted the company’s strong financial performance, strategic capital allocation, international expansion, and undervaluation relative to peers. The company's stock price has depreciated approximately by 5% since our coverage. The thesis still stands as Crocs continues to generate high margins and strong cash flow. Favona Hathaway shares a similar perspective but emphasizes the impact of non-cash accounting charges and the resulting attractive valuation.

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.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW 

Disclosure: None.