Laser Focus World is an industry bedrock—first published in 1965 and still going strong. We publish original articles about cutting-edge advances in lasers, optics, photonics, sensors, and quantum technologies, as well as test and measurement, and the shift currently underway to usher in the photonic integrated circuits, optical interconnects, and copackaged electronics and photonics to deliver the speed and efficiency essential for data centers of the future.

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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

3 Consumer Stocks Walking a Fine Line

CROX Cover Image

Consumer discretionary businesses are levered to the highs and lows of economic cycles. Over the past six months, it seems like demand trends are working against their favor as the industry has tumbled by 3.6%. This performance was disappointing since the S&P 500 climbed 4.5%.

A cautious approach is imperative when dabbling in these companies as many also lack recurring revenue characteristics and ride short-term fads. Taking that into account, here are three consumer stocks we’re passing on.

Crocs (CROX)

Market Cap: $5.78 billion

Founded in 2002, Crocs (NASDAQ: CROX) sells casual footwear and is known for its iconic clog shoe.

Why Does CROX Give Us Pause?

  1. Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
  2. Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 2.2 percentage points
  3. Diminishing returns on capital suggest its earlier profit pools are drying up

Crocs’s stock price of $102.77 implies a valuation ratio of 8.2x forward P/E. Check out our free in-depth research report to learn more about why CROX doesn’t pass our bar.

Hilton Grand Vacations (HGV)

Market Cap: $3.82 billion

Spun off from Hilton Worldwide in 2017, Hilton Grand Vacations (NYSE: HGV) is a global timeshare company that provides travel experiences for its customers through its timeshare resorts and club membership programs.

Why Do We Think Twice About HGV?

  1. 11.6% annual revenue growth over the last two years was slower than its consumer discretionary peers
  2. ROIC of 3.1% reflects management’s challenges in identifying attractive investment opportunities
  3. High net-debt-to-EBITDA ratio of 11× increases the risk of forced asset sales or dilutive financing if operational performance weakens

At $41.75 per share, Hilton Grand Vacations trades at 11.2x forward P/E. Dive into our free research report to see why there are better opportunities than HGV.

Warner Music Group (WMG)

Market Cap: $14.18 billion

Launching the careers of legendary artists like Frank Sinatra, Warner Music Group (NASDAQ: WMG) is a music company managing a diverse portfolio of artists, recordings, and music publishing services worldwide.

Why Is WMG Not Exciting?

  1. Muted 4.4% annual revenue growth over the last two years shows its demand lagged behind its consumer discretionary peers
  2. Projected sales growth of 3.7% for the next 12 months suggests sluggish demand
  3. Underwhelming 10.6% return on capital reflects management’s difficulties in finding profitable growth opportunities

Warner Music Group is trading at $27.25 per share, or 9.4x forward EV-to-EBITDA. To fully understand why you should be careful with WMG, check out our full research report (it’s free).

High-Quality Stocks for All Market Conditions

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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