First, Crocs (CROX) released a strong earnings report that beat estimates and included higher guidance for the next quarter. Things were looking up! Then, its “turnaround” CEO hands in his resignation. The result: CROX stock takes a thumping and is once again a Wall Street pariah.

The boom and bust scenario in the last week of February mirrors the fate of the company in general over the past few years. Crocs raced up to $70 in late 2007 on strong sales of its funky footwear, only to plummet to a mere $1 a share in early 2009.

So what’s the story? Is Crocs doomed for failure or is a good stock with a bad rap? My money is on the latter. Though trading volume is frothy right now, once it settles down CROX could be a good addition to your portfolio.

Let me state for the record that I’ve been burned before on Crocs. In my Emerging Growth newsletter, I told readers to buy up CROX in early 2007. We watched it triple in a matter of months … only to drop like a rock and give it all right back! I don’t recommend this stock again lightly after that gut-wrenching ride, but my latest fundamental analysis shows that Crocs is a stock that’s returning to growth mode and has good upside potential.

Though the news is mixed, estimates for the current quarter look very good right now for Crocs. Though the company did post a loss of 13 cents a share in its Q4 report this week, the company significantly raised its guidance and actually expects to break even when it offers up Q1 numbers. The company also expects first-quarter revenue between $155 million and $160 million — significantly better than the $148 million forecasted by Wall Street analysts.

That’s a very bullish outlook, proving that the fundamentals of this company are improving. However, CROX dropped a bombshell the same day by saying that its “turnaround” CEO John Duerden would resign as of March 1. That’s only a year after taking the helm of the company.

So the million-dollar question is whether Crocs can continue its recovery without Duerden. And I think the answer is “yes.” The new leader of the company will be current Chief Operating Officer John McCarvel, who has worked in Crocs’ management for the past six years and is painfully aware of the company’s boom-and-bust history. I find it hard to believe he would be foolish enough to let the company collapse again after finally getting some momentum back.

What’s more, the hardest choices have already been made at CROX and now it’s just a question of transitioning from damage control and into growth mode. In just a few months after taking control of Crocs, Duerden slashed costs, reached out to retailers and overhauled the company’s inventory scheme to deal with a glut of product. The latest earnings forecasts appear that Crocs has “right-sized” itself, and now it’s a question of being realistic about growth as the economy recovers and the business is returning to profitability.

To be clear, I wouldn’t seriously consider investing in CROX until volume settles down from its spike after earnings and the CEO announcement. There’s a lot of froth out there. But as soon a trading volume subsides, Crocs should be a good buy. As long as the company isn’t being unrealistic with its guidance and continues to manage inventory properly, CROX stock should continue to rise.

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