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QS Research · Michael Burry's Scion Capital analyst template · 2006

Crocs, Inc. (CROX)

As of 2026-11-02 · 12/15 boxes filled from SEC filings and market data

Conclusion: PASS

Conviction low · base case +17% · downside -36% · upside +43%

At $156.02, CROX trades at 10.7x TTM P/E and 8.2x EV/EBITDA, below many peers, but after a 91% one-year run and a >25% post-Q3 surge the easy re-rating is already behind it. I set aside the non-recurring $64 million IEEPA refund and use $946 million TTM EBITDA; a 10x base case implies $182 (+17%), a 6x downside implies $99 (-36%), and a 12x upside implies $224 (+43%). Base upside falls short of +30% and downside exceeds -25%, so neither long nor short is justified. HEYDUDE recovery and heavy buybacks are real positives, but insider selling, a near-52-week-high price, and the one-off earnings boost remove the margin of safety. Pass.

Key numbers

The 15 boxes

  1. ✓ 1. Long-form business notes

    Crocs, Inc. designs, markets, and sells casual footwear and accessories through two reportable segments, Crocs Brand and HEYDUDE Brand, using wholesale and direct-to-consumer channels; FY2025 consolidated revenue was $4.04B. Between the FY2020 and FY2025 10-Ks, the company added HEYDUDE, shifted from three distribution channels to two, and expanded international sales and sourcing, while revenue more than tripled from $1.39B to $4.04B. Crocs Brand centers on clogs, sandals, and Jibbitz charms with Croslite material; HEYDUDE centers on Wally and Wendy loafers. FY2025 operating income contracted to $149.5M from $1.02B in FY2024, and FY2025 net loss was $81.2M.

  2. ✓ 2. Competitive advantage

    Crocs relies on brand strength (Crocs and HEYDUDE) and proprietary Croslite, LiteRide, and Free Feel material formulations as its key competitive advantage. The footwear market is highly competitive, with rivals like NIKE, adidas, Deckers, Birkenstock, Steven Madden, Wolverine, and V.F. holding scale and marketing advantages. Revenue plateaued near $4.0B in FY2024-FY2025, and FY2025 operating income collapsed to $149.5M from $1.02B in FY2024, partly tied to a HEYDUDE impairment trigger. No clear evidence of durable cost or switching advantages beyond brand and trade secrets.

  3. ✓ 3. 10-Q takeaways

    Q3 2026 revenue rose 4.6% to $1,042.6 million, with Crocs Brand +4.4% and HEYDUDE +6.1%. Gross margin jumped to 66.2% from 58.5%, largely on non-recurring IEEPA tariff refunds; operating income reached $291.9 million and diluted EPS $4.52. Liquidity remained strong with $163.5 million cash and $901.4 million available borrowings, and the company repurchased $250.0 million of stock in the quarter. The 10-Q gives no formal numeric guidance, and Item 1A states no material change to risk factors.

  4. ✓ 4. Corporate governance
  5. ✓ 5. Overview of the prior 3 years of 8-K filings
  6. ✓ 6. Other significant filings
  7. ✓ 7. Chronology of significant news and events
  8. ✓ 8. Comparables valuation interpretation
  9. ✓ 9. Insider trading interpretation
  10. ○ 10. Earnings-call notes
  11. ○ 11. Impression of the shareholder letter
  12. ○ 12. Scuttlebutt overview
  13. ✓ 13. Valuation and risk/reward summary
  14. ✓ 14. Current price suppression and potential catalysts

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