CROX short
June 24, 2010
– Comments (5) |
RELATED TICKERS: CROX
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CROX Short
A former fad company in decline.
Upon this rally in CROX share price over the past year (from just $2.55 to now over $11), CROX makes for a nice short.
The shoes were a fad, and if you don’t think that qualitatively, just look at the numbers for yourself. Revenues have declined from $847 million in 2007, down to $722 million in 2008, and then down to $646 million in 2009. Don’t blame anything on a recession. This is simply the result of 9 year olds not begging their parents for a pair of Crocs anymore, because they just are not “cool” anymore.
So yup, I think the company trading at a market cap of nearly $1 billion is just too high.
I also think the forward estimated that analysts are giving this company are just too darn high too. They are predicting EPS of $0.69 in 2011. I think that is absurd, along with their revenue growth estimates to $724 million in 2010 and up to $797 million in 2011.
I know some people love this company and their products… so don’t get all butt-hurt in the comments trying to justify CROX. Just send me a picture of you wearing Crocs, and I’ll evaluate it and tell you if you look “cool” (the answer will be no).
RK
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