Is Crocs Stock a Buy After a Recent Analyst Upgrade?

The stock is cheap and could have big upside if the company can start to see improved revenue growth.

One of the quieter stock winners this year has been Crocs (NASDAQ: CROX) , the maker of clog shoes. The footwear stock is up nearly 50% on the year and recently received an analyst upgrade from Baird.

Baird analyst Jonathan Komp took his rating of Crocs from "neutral" to "outperform," while raising his price target from $115 to $150. Komp noted that he has more confidence that the Crocs brand is starting to recover in North America, and that its HeyDude brand is making progress.

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The analyst believes that the actions the company took to clean up Croc inventory and cut promotions last year, along with product innovation, are starting to result in improved sales. Meanwhile, he thinks that HeyDude is finally starting to get past the inventory issues that have plagued the brand.

Komp forecasts that Crocs could generate adjusted earnings per share (EPS) of $13.55 this year, with it reaching $14.90 in 2027. However, if sales can accelerate and it buys back more shares, adjusted EPS could climb closer to $17 in 2027.

The Crocs brand has generally held up pretty well over the past few years, even if growth has slowed. Meanwhile, it is seeing some pockets of strength.

International sales jumped 7% last quarter to $421 million, while direct-to-consumer (DTC) revenue rose 13% to $322 million. If it is starting to see better traction in North America, as Komp suggests, that is a big positive for the stock.