| Last August, The Value Meter took a look at niche shoe manufacturer Crocs Inc. (Nasdaq: CROX) and rated the stock as "Slightly Undervalued." I was impressed by the company's growth. The shoe brand had just seen second quarter 2022 sales increase 19% year over year. Even better, despite this growth, the stock was trading at a very attractive single-digit price-to-earnings (P/E) ratio. Since then, the stock market has taken a liking to it as well. Crocs shares have jumped from $72 to $121. That's a 68% increase in just over six months! While I definitely liked the opportunity in Crocs shares last August, I did have one concern... The company had recently spent $2.5 billion acquiring the rapidly growing Hey Dude shoe brand in February 2022. I liked the acquisition but didn't love that Crocs had taken on a huge amount of debt to finance it. Prior to the acquisition, Crocs' balance sheet was pristine. I hated to see that change. But now - with a 68% rise in Crocs' share price and a bunch more debt - are shares overvalued? |
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