Crocs buys out Hey Dude, ends 2021 with a 103% stock gain

Posted: 3 January 2022 4:51 pm

Analyst forecasts predict another big year in 2022 for the foam clog maker.

Fashionably unfashionable Crocs (CROX) announced a buyout of small Italian shoemaker Hey Dude last week, and Wall Street didn’t like its style, dropping the stock 12%.

But Crocs quickly made up much of that gap as it close out a very good 2021. CROX stock basically doubled, gaining more than 103% for the year. And analyst see solid gains again in 2022.

Beyond the basics
The acquisition seems to fit with Crox’s strategy to branch beyond its colorful foam clogs and sandals, prized for their comfort and often mocked for their look.

In a statement released December 23, Crocs reported its plans to acquire Hey Dude for $2.5 billion — $2.05 billion in cash and another $450 million in Crocs shares.

“With the acquisition of Hey Dude, we are thrilled to add another high-growth, highly profitable brand to our portfolio,” said Crocs CEO Andrew Rees. “We intend to leverage our global presence, best-in-class marketing and scale infrastructure to build upon Hey Dude’s strong foundation and create significant shareholder value.”

Despite the initial negative market reaction, Crocs stock has had tremendous market success over the last two years.

The deal highlights a strong run

After dropping at the onset of the COVID-19 pandemic in March 2020 to a low below $11, Crocs stock surged nearly 650% by the end of that year.

The stock peaked at $183.88 per share in mid-November of 2o21, following third-quarter earnings and revenue that exceeded analysts’ expectations. They have fallen back since, ending 2021 at $128.22.

Crocs reported revenue of $625.9 million for the third quarter, up 73% from the previous year, and earnings per share of $2.47 compared to $0.94 the previous year.

For the full year, Crocs sees revenue growing between 62% and 65% from 2020 levels.

Analysts see more room for growth. Analysts estimates put Croc stock at $203.88 over the next 12 months, a 57% premium over its current price, giving it a Buy.

For 2022, Crocs estimates revenue growth to exceed 20% compared to 2021. Analysts estimate revenue of $2.94 billion for 2022.

What are Crocs?

Crocs is an American shoe company based in Broomfield, Colorado. The company was founded in 2002 and is known for its unique Crocs brand of foam clogs.

Crocs launched on the Nasdaq in 2006 under the ticker symbol CROX. The stock is up almost 1,800% in the last five years.

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