Analyst Downgrades Underperforming Crocs Stock

The options pits remain firmly bullish towards CROX

Digital Content Manager
Apr 4, 2022 at 11:33 AM
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Crocs, Inc. (NASDAQ:CROX) is attracting negative analyst attention this morning. Loop Capital downgraded the equity to "hold" from "buy," while lowering its price target to $80  from $150. The analyst said sentiment towards CROX is changing, and that more clarity is needed on the retail name's normalized growth and margin rates. At last check, the stock is up 0.6% to trade at $76.16.

Loop Capital's bear note is certainly indicative of that sentiment shift, given the last time we checked on Crocs stock, it was attracting bull notes. The security has struggled with resistance at the $85 level since February, while the 40-day moving average has kept a tight lid on the shares since December. Since the start of the year, CROX has shed 40.7%.

Nonetheless, the options pits are firmly bullish, with calls popular in the last two weeks. Over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), CROX's 10-day put/call volume ratio of 3.50 ranks higher than 90% of annual readings. This means calls are getting picked up at a much quicker-than-usual pace.  

Now looks like an excellent opportunity to bet on the equity's next move with options. This is per the Crocs stock's Schaeffer's Volatility Index (SVI) of 54%, which sits in the relatively low 20th percentile of its 12-month range, meaning options players are pricing in low volatility expectations at the moment.  Plus, its Schaeffer's Volatility Scorecard (SVS) sits at a high 95 out of 100. This indicates CROX has exceeded options traders' volatility expectations over the past year.


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