Crocs: Zacks’Bear of the Day Play

Crocs (CROXSnapshot Report) has missed the Zacks Consensus Estimate in each of the last two reports, and it wasn’t even close. Misses of $0.41 and $0.42 translated and it is now a Zacks Rank #5 (Strong Sell) and today it is the Bear of the Day.

The Numbers

CROX missed the Zacks Consensus Estimate of ($0.35) by $0.42 for a 120% negative earnings surprise. Revenues came in a little above expectations at $209M for a 2.8% positive revenue surprise.

Description

Crocs makes and sells casual lifestyle footwear and accessories. As of December 31, 2015, Crocs operated 275 retail stores; 98 kiosks and store-in-stores; 186 outlet stores; and 12 company-operated e-commerce Web stores. The company was founded in 1999 and is headquartered in Niwot, Colorado.

Earnings History

Usually when a stock is the Bear of the Day, the earnings history is filled with misses. This is not the case for CROX, as it is mostly hit and miss. The company has beat the Zacks Consensus Estimate in three of the last six quarters.

Estimates

Here is the real reason the stock is a Zacks Rank #5 (Strong Sell) and the Bear of the Day. The Zacks Consensus Estimate has fallen steadily over the last few months. The FY16 estimate stood at $0.55 in September but fell to $0.32 in December and is now down to $0.20 in April.

Next year is seeing a similar move to the downside, with numbers sliding from $0.86 to $0.61 down to $0.53 over the same time period as mentioned above. That is the reason this stock is a Zacks Rank #5 (Strong Sell).

Chart

Zacks has developed a chart that helps investors see how earnings estimates have impacted the price of the stock over the last several years. We call this chart the price and consensus chart, and each color coded lines represents analyst estimates over a designated year. As estimates increase, the stock tends to follow. The Zacks Rank is impacted by earnings estimate increases, beats and incorporates the idea of analyst agreement and magnitude. As a Zacks Rank #5 (Strong Sell) we see that estimates are moving higher.

Follow Brian Bolan on twitter at @BBolan1

Brian Bolan is a Stock Strategist for Zacks.com. He is the Editor in charge of the Zacks Stocks Under $10, an investor service , where he recommends the stocks in the portfolio.

Brian also runs the brand new Zacks Game Changers where he looks for stocks that are disrupting their industries and reaping big gains.

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