Crocs (CROX, Financials) shares jumped 7.59% Monday after Williams Trading upgraded the stock to Buy and raised its price target to $135 from $83. The firm cited strong international performance and valuation support following the shoemakers robust first-quarter earnings.

Warning! GuruFocus has detected 5 Warning Sign with CROX.

Crocs reported earnings per share of $3.00 for Q1 2025, beating analyst expectations of $2.48. Revenue reached $937 million, topping the $907.11 million consensus forecast. International revenue grew 12.3% on a currency-neutral basis, and sales of HEYDUDE outperformed analyst concerns.

Crocs trades at a price-to-earnings ratio of 6.7x and carries a gross profit margin of 59.25%, according to InvestingPro. Analysts view the stock as undervalued relative to peers.

The company withdrew full-year 2025 guidance due to uncertainty in tariffs and demand. However, a recent U.S.-China trade agreement slashed tariffs on Chinese goods from 145% to 30%, a development not previously factored into Crocs projections.

Williams Trading said the company could enhance brand value by shifting from aggressive expansion to a scarcity-based brand model. Analysts at Needham and Stifel also maintain Buy ratings, with targets at $129 and $127, respectively.

Investors will be watching how Crocs navigates tariff policy and whether its pivot in branding strategy sustains momentum.

This article first appeared on GuruFocus.

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