Last week’s earnings lineup featured several highly ranked Zacks stocks that were able to beat expectations.
Here is a look at two top-rated stocks that investors may want to consider buying as they continue to stand out following their strong fourth-quarter reports.
Crocs (CROX)
Sporting a Zacks Ranks #2 (Buy) footwear and apparel company Crocs beat Q4 top and bottom line expectations last Thursday.
Crocs impressively beat bottom-line expectations by 21% with EPS at $2.65, up 23% from $2.15 per share a year ago. On the top line, Crocs topped estimates by roughly 1% with sales at $945.16 million, up an outstanding 61% YoY.
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More impressive, Crocs has now beaten top and bottom line expectations for 11 consecutive quarters dating back to July 2020. The leading footwear brand continues to be a leader in the Textile - Apparel Industry which is currently in the top 35% of over 250 Zacks Industries.
Crocs looks poised to benefit from its wide range of footwear products which includes sandals, wedges, flips, and slides that cater to people of all ages. The company also attributed its stellar growth over the last year to the acquisition of Italian footwear brand HEYDUDE which it acquired last February.
While Wall Street first questioned the $2.5 billion acquisition, the HEYDUDE brand has become very popular with younger generations and this is expected to add continued growth to Crocs’ top and bottom lines.
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To that note, Crocs earnings estimate revisions for fiscal 2023 and fiscal 2024 have started to trend higher again as shown in the above chart and this could continue following the company’s impressive fourth-quarter report.
Fiscal 2023 earnings are expected to decline –2% to $10.70 per share after a very exceptional 2022 that saw EPS increase 31%. However, FY24 earnings are expected to jump 13% to $12.14 per share. Even better, fiscal 2024 would be a mind-blowing 654% increase from pre-pandemic levels with 2019 EPS at $1.61.
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On the top line, sales are expected to jump 11% in FY23 to $3.94 billion after what was already a record annual year for revenue in 2022. Fiscal 2024 sales are projected to rise another 10%. Furthermore, with 2019 sales at $1.23 billion, FY24 sales projections of $4.34 billion would represent 253% growth from pre-pandemic levels.
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Crocs currently sports an “A” Style Scores grade for Growth along with an overall “A” VGM grade for the combination of Value, Growth, and Momentum. While many companies have struggled with higher inflation and experienced a slowdown during the pandemic, Crocs has continued growing with CROX stock up +233% over the last three years to easily top the S&P 500’s +26% and the Textile-Apparel Manufacturing Markets -7%.