Is It Time to Cash Out on Crocs Stock?

CROX has taken a breather from November record highs

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When we last checked in with Crocs, Inc. (NASDAQ:CROX), the specialty retailer was gapping higher after earnings. The stock rode that momentum to a record high of $183.88 on Nov. 15, but what has CROX done since then?

The shares have taken quite the breather, today trading down 2.2% to trade at $158.22, and on track to breach their 50-day moving average on a closing basis for the first time since that mid-October breakout. Year-to-date though, the stock remains up 152%.

CROX Stock Chart

Plus, put traders have been growing bolder in recent months. This is indicated by CROX's 50-day put/call volume ratio of 0.90 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks one percentage point from an annual high. So while calls still outnumber puts on an absolute basis, the high ratio indicates that such a put skew is rare for the last year.

Echoing this, the Schaeffer's put/call open interest ratio (SOIR) comes in at 0.99 and ranks in the 91st percentile of its annual range. This indicates near-term put open interest outweighs call open interest by a wider-than-usual margin at the moment.

From a fundamental point of view, Crocs has delivered a massive boost to its revenues and net income over the past year. Since fiscal 2020, CROX's trailing 12-month revenues and net income have increased 54% and 141%, respectively. In addition, the footwear company’s revenues are up 109% since fiscal 2017 and its net income has increased more than $820 million since reporting $69 million in net losses for fiscal 2018.

Moreover, CROX trades at a decent price-earning ratio of 14.12 despite Crocs stock going on a massive bullish run since March of 2020. However, the footwear stock is expected to deliver a drop in earnings in the coming year, with analysts placing a forward price-earnings ratio of 18.66 on Crocs stock. Nonetheless, CROX’s valuation continues to be attractive from a long-term perspective given its growth rate in recent years.

Lastly, the equity's Schaeffer's Volatility Scorecard (SVS) stands at 85 out of 100. This suggests DG has exceeded options traders' volatility expectations during the past year.

 
 




 
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