Among leading growth stocks, our IBD 50 Stocks To Watch pick for today is Crocs (CROX). The Colorado-based company is famous for manufacturing men’s, women’s and children’s casual slip-on footwear made with proprietary resin material.
On Wednesday, shares of Crocs stock tested support at the 10-week moving average and have since moved higher from this area.
Shares of Crocs are now trading roughly 5% above their 10-week line. Gaining support from this level is key because it acts as an additional buy point. This new entry serves as another ideal area for investors to add shares of Crocs stock to an existing position.
The growth stock has certainly been on a tear this year. Shares have climbed an impressive 125% since Dec. 31.
In 2021, Crocs stock has spent nearly all its time coasting above the 50-day line, a bullish sign. The stock briefly dipped below this area in March and April but quickly recovered. Crocs’ most recent breakout occurred back in May when it broke out from a 110.01 buy point in a five-week flat base.
Crocs stock holds a sharp 98 Relative Strength Rating. This indicates the growth stock is outpacing 98% of stocks in IBD’s database. The stock also carries a perfect 99 IBD Composite Rating, which exceeds the minimum of 90 we like to see for growth stocks.
Crocs Stock: Cultlike Following
Crocs stock is a part of IBD’s Apparel-Shoes & Related Manufacturing industry group. This 10-stock group has collectively risen for 17 months straight, with a year-to-date gain of nearly 42%. Headed into Thursday’s trade, the group ranks No. 30 out of the 197 industries tracked by IBD.
The stock, which ranks No. 1 in the industry group by Composite Rating, owes much of its success to its cultlike following among Gen Z shoppers. Crocs has partnered with pop culture favorites like Justin Bieber and Grammy-winning DJ and producer Diplo among others.
On July 22, shares popped 10% in reaction to a strong quarterly report that showed top-line growth of 93%. Meanwhile, earnings rose 121% year over year to $2.23 a share, clocking in five straight quarters of earnings growth. As customers turned to online shopping during the pandemic, digital sales were a key driver of revenue growth for Crocs.
“We continue to see strong consumer demand for the Crocs brand globally. On the back of record second quarter results and continued momentum, we are raising our full year 2021 guidance,” said Andrew Rees, Chief Executive Officer, in a recent news release.
The firm sees third-quarter revenue rising 60%-70%, with full-year sales up 60%-65%. Both well exceed the original consensus numbers.