CROX

Crocs ($CROX) Former CEO Director Buys $720K Amid 50% Plunge...Forward P/E 6.82 Undervaluation vs Tariff Concerns

11/12/2025 22:10

Crocs ($CROX) is drawing investor attention for a simple reason: insiders are consistently buying while the stock has plummeted nearly 50%. The timing and scale of director purchases are particularly noteworthy. Crocs, founded in 1999, is a casual footwear brand that gained global recognition with its distinctive clog design. The company manufactures and sells various casual shoes and accessories through its Crocs and HEYDUDE brands, including clogs, sandals, sneakers, and boots. It employs approximately 7,910 people and operates through multiple distribution channels including wholesale, retail, and e-commerce. The most striking activity comes from Director John Replogle, who made three purchases totaling 7,497 shares between August 2024 and November 2025. His timing is particularly telling: 1,996 shares at $123.31 on August 2, 2024, 3,261 shares near $74.39 on August 8, 2025, and most recently 3,000 shares at $74.50 on November 11, 2025. He's been increasing purchase sizes as the stock declined, investing approximately $720,000 total. Replogle, former CEO from 2014-2017, successfully led the company's turnaround during his tenure. His trading history shows a pattern of buying at lows, suggesting deep understanding of the company's intrinsic value. EVP Susan Healy (former CFO) also made two purchases totaling 3,000 shares in November 2024 and August 2025. Conversely, other executives mostly sold shares. CEO Andrew Rees sold 10,000 shares in June 2024, and several EVPs conducted significant sales. This contrasts with typical insider trading patterns, making the consistent director purchases more meaningful. The stock has fallen approximately 48% from $153.93 in June 2024 to $80.54 in September 2025. Two major drops occurred: a 19% plunge from $138.05 to $111.58 after October 29, 2024 earnings, and a 29% crash from $105.13 to $74.39 on August 7, 2025. Ironically, earnings performance has been solid. Q3 2024 delivered EPS of $3.60 versus $3.10 expected, with revenue of $1.06 billion beating estimates. Q1 2025 adjusted EPS of $3.00 also exceeded the $2.48 consensus. The stock decline stems from guidance concerns and tariff issues. In August 2025, the company projected Q3 revenue to decline 9-11%, opposite to analysts' expected 0.3% growth. Management also cited tariff-related operating margin pressure. The Trump administration's tariff policies have significantly impacted the footwear industry, hitting Crocs directly. Financially, Crocs presents a mixed picture. TTM revenue of $4.07 billion declined 6.2% year-over-year, but operating cash flow remains strong at $784 million. Operating margin of 20.84% demonstrates solid profitability, though the debt-to-equity ratio of 125.14% raises leverage concerns. The most compelling metric is the forward P/E of 6.82, suggesting the market expects significant earnings improvement ahead. This contrasts sharply with the trailing P/E of 25.85. Analysts' average price target of $89.50 implies over 20% upside potential. For investors, positive factors include insider buying, attractive valuation, strong cash flow, and solid brand power. Negatives encompass tariff concerns, guidance cuts, high leverage, and consumer spending worries. Key upcoming catalysts include Q3 results and guidance updates. Whether the projected 9-11% revenue decline materializes and the extent of tariff impact will drive stock direction. Additional insider purchases would provide further positive signals. Crocs stands at a crossroads. Whether current challenges are temporary or structural will significantly impact investment outcomes. However, persistent insider buying certainly merits positive interpretation.