Should Value Investors Buy Crocs (CROX) Stock?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Crocs (CROX). CROX is currently holding a Zacks Rank #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 6.89. This compares to its industry's average Forward P/E of 16.22. CROX's Forward P/E has been as high as 10.77 and as low as 5.62, with a median of 7.89, all within the past year.

Another valuation metric that we should highlight is CROX's P/B ratio of 3.17. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. CROX's current P/B looks attractive when compared to its industry's average P/B of 7.13. Within the past 52 weeks, CROX's P/B has been as high as 5.29 and as low as 2.52, with a median of 3.37.

Finally, we should also recognize that CROX has a P/CF ratio of 14.42. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. CROX's current P/CF looks attractive when compared to its industry's average P/CF of 21.64. Over the past year, CROX's P/CF has been as high as 19.53 and as low as 4.86, with a median of 6.52.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Crocs is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CROX feels like a great value stock at the moment.

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This article originally published on Zacks Investment Research (zacks.com).

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