Crocs, Inc. (NASDAQ:CROX) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's forecasts. The revenue forecast for next year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.
After the upgrade, the seven analysts covering Crocs are now predicting revenues of US$3.2b in 2022. If met, this would reflect a huge 51% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$2.9b of revenue in 2022. It looks like there's been a clear increase in optimism around Crocs, given the nice gain to revenue forecasts.
We'd point out that there was no major changes to their price target of US$192, suggesting the latest estimates were not enough to shift their view on the value of the business. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Crocs, with the most bullish analyst valuing it at US$250 and the most bearish at US$157 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Crocs shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Crocs' past performance and to peers in the same industry. It's clear from the latest estimates that Crocs' rate of growth is expected to accelerate meaningfully, with the forecast 39% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 12% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 10% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Crocs to grow faster than the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for next year. They're also forecasting more rapid revenue growth than the wider market. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at Crocs.
Analysts are definitely bullish on Crocs, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including a weak balance sheet. For more information, you can click through to our platform to learn more about this and the 3 other flags we've identified .
We also provide an overview of the Crocs Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.