Crocs(US:CROX) The Motley Fool·2025-12-03 20:00Core Viewpoint - There is growing concern about a potential stock market bubble in artificial intelligence (AI), leading investors to consider reducing their exposure to AI stocks and explore value stocks like Sprouts Farmers Market and Crocs [1][2]. Group 1: Sprouts Farmers Market (SFM) - Sprouts Farmers Market has a market capitalization of $8 billion and is currently trading at $85.06, with a 53% drawdown from its highs earlier in 2025 [3][4]. - The company is experiencing slowing comparable-store sales growth, with expectations of 0%-2% year-over-year growth in the fourth quarter, following a strong growth of over 10% in the same period last year [4][5]. - Management anticipates a 7% growth in comparable-store sales for the entire year of 2025 and aims for low- to mid-single-digit growth in the long term, slightly outpacing inflation [6]. - Sprouts operates 464 stores and plans to expand at a 10% annual rate, providing a durable opportunity for sales growth over the next decade [7]. - The stock trades at a forward price-to-earnings (P/E) ratio under 16, which is considered cheap for a company expected to grow at an above-average rate [8]. Group 2: Crocs (CROX) - Crocs has a market capitalization of $4 billion and is currently trading at $89.95, also experiencing a significant drawdown from its highs [10]. - The company reported a 9% year-over-year decline in sales in North America last quarter, but has shown resilience over the past two decades, particularly among younger consumers [12]. - Internationally, Crocs is performing well, with a 6% year-over-year revenue increase outside North America, which is expected to surpass its North American business soon [13]. - The stock trades at a forward P/E ratio of just 7, and management is actively repurchasing shares, having retired 2.4 million of its 52 million outstanding shares last quarter [14].