Crocs Breaks out From Channel on Strong Guidance

Crocs, Inc. (CROX) shares soared more than 8% during Monday's session as fourth quarter, full year, and fiscal 2021 guidance came in ahead of expectations.

The company expects fourth quarter revenue to increase 55% to $407 million to $410 million, which is sharply higher than the $330.07 million consensus estimates and higher than its previous range of 20% to 30% growth. Full-year revenue is projected to grow 12% to $1.381 billion to $1.384 billion, versus a consensus of $1.3 billion and up from guidance of 5% to 7% growth.

Next year, the company predicts growth of between 20% to 25% on the top line, which is higher than the 13% consensus estimate for growth in 2021.

From a technical standpoint, the stock broke out from its price channel to fresh highs. The RSI moved into overbought territory with a reading of 72.52, but the MACD experienced a bullish crossover. These indicators suggest that the stock could see some consolidation above trendline support over the coming sessions, but the intermediate-term trend remains bullish.

Traders should watch for the stock to consolidate near trendline support levels at around $72.00. If the stock breaks down from these levels, it could move back into its price channel marked by a high of $72.00 and a low of $64.00. A further breakdown from these levels could lead to a move toward reaction lows of around $60.00 or prior highs of $44.00, although that scenario appears unlikely given the fundamental strength.

The Bottom Line

Crocs shares moved sharply higher during Monday's session after fourth quarter, full-year, and fiscal 2021 guidance came in higher than expected. With the RSI reaching overbought levels, traders could see some near-term consolidation, but the overall trend remains bullish.

The author holds no position in the stock(s) mentioned except through passively managed index funds.