Crocs, Inc. Just Beat EPS By 11%: Here's What Analysts Think Will Happen Next

It's been a pretty great week for Crocs, Inc. (NASDAQ:CROX) shareholders, with its shares surging 11% to US$119 in the week since its latest annual results. It looks like a credible result overall - although revenues of US$4.0b were in line with what the analysts predicted, Crocs surprised by delivering a statutory profit of US$12.79 per share, a notable 11% above expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Crocs after the latest results.

View our latest analysis for Crocs

Taking into account the latest results, the consensus forecast from Crocs' 14 analysts is for revenues of US$4.13b in 2024. This reflects a credible 4.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to decrease 7.5% to US$12.12 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$4.15b and earnings per share (EPS) of US$11.83 in 2024. So the consensus seems to have become somewhat more optimistic on Crocs' earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 8.2% to US$136. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Crocs analyst has a price target of US$160 per share, while the most pessimistic values it at US$95.00. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Crocs' revenue growth is expected to slow, with the forecast 4.2% annualised growth rate until the end of 2024 being well below the historical 31% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.0% annually. Factoring in the forecast slowdown in growth, it seems obvious that Crocs is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Crocs' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Crocs' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Crocs analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Crocs that you need to be mindful of.

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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.