Crocs Gains on Upbeat Forecast for Sales. This Stock Still Has Legs.

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Crocs is heavily exposed to malls, which consumers have been avoiding. Victor J. Blue/Bloomberg

Crocs is rising early Tuesday, a day after the footwear maker provided a very upbeat sales outlook.

On Monday, Crocs (ticker: CROX) said it expected fourth-quarter revenue to come in between $407 million and $410 million, well above the $378 million that analysts were expecting. In addition, it sees revenues rising 20% to 25% for 2021, putting them at roughly $1.66 billion to $1.73 billion, again far ahead of the $1.35 billion consensus estimate on Wall Street.

Crocs stock was up 2% to $76.48 in early trading, after rising on Monday as well. The fourth-quarter guidance is particularly impressive, given that people spend less time outside during the winter, and tend to favor heavier footwear when they do go out. Add in the fact that Crocs is heavily exposed to malls, which consumers have been avoiding, and the news is a testament to the company’s growth and execution in digital sales channels.

Investors may be most heartened by the full-year outlook. Crocs’ focus on comfort and the outdoors helped it thrive during the Covid-19 pandemic, but like other major winners, it faces questions about whether or not it can keep that momentum going as vaccines allow life to slowly return to normal. The guidance suggests that it can.

Not surprisingly, several analysts raised their targets for the stock price.

B. Riley’s Susan Anderson reiterated a Buy rating and raised her target to $87 from $72. She wrote that the company will “remain a strong performer in a post-Covid world as consumers look for casual footwear, management’s expansion into key markets such as China, growth of sandals, attracting new customers with social media marketing, and continued margin leverage due to a pullback on promos.”

Stifel’s Jim Duffy reiterated a Hold rating on the shares but raised his price target to $76 from $56. “Strength in the business continues to reflect domestic, digital, and clog demand,” he said, while revenue from its wholesale, overseas, and accessories businesses “further support the growth outlook into 2021.”

UBS analyst Jay Sole reiterated a Neutral rating but raised his target to $75 from $63. “The pivotal Crocs question is if the company can continue generating solid growth rates post Covid-19. After Crocs’ strong, above consensus fourth quarter update and our meeting with CEO Andrew Rees and CFO Anne Mehlman, we increasingly believe the answer is yes.”

Crocs is up nearly 50% since Barron’s recommended the stock in September.

Write to Teresa Rivas at teresa.rivas@barrons.com