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Malibu Boats (MBUU - Free Report) , a leading designer and manufacturer of sport boats, is bumping into some considerable slowdowns in top and bottom-line expectations, giving it a Zacks Rank #5 (Strong Sell) rating.
The bout of consumer exuberance which followed the Covid-19 lockdown pulled forward considerable buying of large-ticket items like boats. Because of this, sales at Malibu Boats jumped well above trend and while it was welcome at the time, is limiting sales over the next year or two.
As buying a boat is not something that is done regularly, the company is likely to see a slowdown in growth moving forward and should be avoided for now.
Earnings Estimates
The dynamic troubling Malibu Boats has not been missed by analysts, as they have unanimously lowered earnings estimates for the company. Current quarter sales have been revised lower by -53% over the last two months and are projected to fall -71% YoY to just $0.77 per share. FY24 earnings estimates have been lowered by -37% and are expected to fall -43% YoY.
Top-line growth is expected to tank in the coming year. Current quarter sales are expected to decline -39% YoY to $228 million and FY24 by -32% to $940 million.
It seems every time I come back to this stock both sales and earnings estimates have been revised lower.
Image Source: Zacks Investment Research
Valuation
What concerns me further is that even with the falling top and bottom line, Malibu Boats still has a historically premium valuation. With a one year forward earnings multiple of 14.9x, it is almost 50% above its five-year median of 9.9x.
Image Source: Zacks Investment Research
Bottom Line
While Malibu Boats is experiencing near-term challenges, the stock is by no means a zero. However, based on the current setup, I think investors should seek out other opportunities in the market.
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Bear of the Day: Malibu Boats (MBUU)
Malibu Boats (MBUU - Free Report) , a leading designer and manufacturer of sport boats, is bumping into some considerable slowdowns in top and bottom-line expectations, giving it a Zacks Rank #5 (Strong Sell) rating.
The bout of consumer exuberance which followed the Covid-19 lockdown pulled forward considerable buying of large-ticket items like boats. Because of this, sales at Malibu Boats jumped well above trend and while it was welcome at the time, is limiting sales over the next year or two.
As buying a boat is not something that is done regularly, the company is likely to see a slowdown in growth moving forward and should be avoided for now.
Earnings Estimates
The dynamic troubling Malibu Boats has not been missed by analysts, as they have unanimously lowered earnings estimates for the company. Current quarter sales have been revised lower by -53% over the last two months and are projected to fall -71% YoY to just $0.77 per share. FY24 earnings estimates have been lowered by -37% and are expected to fall -43% YoY.
Top-line growth is expected to tank in the coming year. Current quarter sales are expected to decline -39% YoY to $228 million and FY24 by -32% to $940 million.
It seems every time I come back to this stock both sales and earnings estimates have been revised lower.
Image Source: Zacks Investment Research
Valuation
What concerns me further is that even with the falling top and bottom line, Malibu Boats still has a historically premium valuation. With a one year forward earnings multiple of 14.9x, it is almost 50% above its five-year median of 9.9x.
Image Source: Zacks Investment Research
Bottom Line
While Malibu Boats is experiencing near-term challenges, the stock is by no means a zero. However, based on the current setup, I think investors should seek out other opportunities in the market.