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Malibu Boats (MBUU - Free Report) is a Zacks #1 (Strong Buy) that operates as a designer, manufacturer and marketer of sports boats, primarily in the US. The company operates in three segments: Malibu, Cobalt and Pursuit. Its brands include, Axis, Cobalt, Pursuit and Malibu, which are primarily used for recreational boating and fishing.
The company had a solid earnings report in November that sent shares grinding higher into the end of the year. After recently hitting highs, investors must decide if there is more meat on the bone as we head into the next earnings report.
About the Company
Malibu is headquartered in Loudon, Tennessee and was founded in 1982. The company operates through a network of independent dealers and employs almost 1,800.
Malibu has a market cap of about $1.5 Billion and has Zacks Style Scores of “A” in Growth and “C” in Value. The Forward PE is 15 and the company offers no dividend
Q1 Earnings
Malibu last reported earnings in early November, with a 30% EPS beat to the upside. The company reported Q1 EPS at $1.13 v the $0.87 expected, while revenue came in at $181M v $179M.
Malibu also guided higher, seeing initial FY2021 revenue up 20%. Adjusted EBITDA was up 28% year over year, while unit volume boats were down 5.3% year over year. Management mentioned that despite the decrease in unit volume, they are optimistic in 2021, given record low inventories and sustained retail demand.
The beat was the eighteenth straight from Malibu, who hasn’t missed on EPS since 2016. The company will look to beat again, when it reports on February 9th.
Estimates
Over the last 30 days, earnings estimates have jumped higher. For the next quarter, we have seen estimates raised by 10%, from $1.41 to $1.56. For the current year, we have seen a 11% move higher in that same time frame.
Numbers are likely headed higher as the recreational marine industry is seeing some positive trends. According to Statistical Surveys, new boat registrations for December 2020 increased 37% year over year, with total registrations rising 13% y/y.
Positive tailwinds in the industry include stimulus, a rising stock market and the post-pandemic need to get out, all whcih could help boost the quarter.
The Technicals
The stock hit a low of $18.02 during the March COVID panic and bounced to the $50 level, where it chopped around for most of the year. Since the earnings report in November, the stock has grinded higher to the $75 level, recently topping out above $80.
Malibu investors now must wait for earnings as the stock sits near all-time highs. For investors looking to buy the dip, the 21-day MA is $69, while the 50-day is $64. A larger move lower would find support at the $53.50 level, where the 200-day resides.
For those that like Fibonacci levels, the 161.8% target was already hit at $73. However, the next aggressive spot to look for, which is the 261.8% Fib level, is at $107.
Bottom Line
The pent-up demand that will hit this summer after the worst of COVID has past will be massive. People will want to be out on that lake and in their boat. Considering stimulus, easy money and the urge to get on the water, Malibu is well position to see success for the rest of the year.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Bull of the Day: Malibu Boats (MBUU)
Malibu Boats (MBUU - Free Report) is a Zacks #1 (Strong Buy) that operates as a designer, manufacturer and marketer of sports boats, primarily in the US. The company operates in three segments: Malibu, Cobalt and Pursuit. Its brands include, Axis, Cobalt, Pursuit and Malibu, which are primarily used for recreational boating and fishing.
The company had a solid earnings report in November that sent shares grinding higher into the end of the year. After recently hitting highs, investors must decide if there is more meat on the bone as we head into the next earnings report.
About the Company
Malibu is headquartered in Loudon, Tennessee and was founded in 1982. The company operates through a network of independent dealers and employs almost 1,800.
Malibu has a market cap of about $1.5 Billion and has Zacks Style Scores of “A” in Growth and “C” in Value. The Forward PE is 15 and the company offers no dividend
Q1 Earnings
Malibu last reported earnings in early November, with a 30% EPS beat to the upside. The company reported Q1 EPS at $1.13 v the $0.87 expected, while revenue came in at $181M v $179M.
Malibu also guided higher, seeing initial FY2021 revenue up 20%. Adjusted EBITDA was up 28% year over year, while unit volume boats were down 5.3% year over year. Management mentioned that despite the decrease in unit volume, they are optimistic in 2021, given record low inventories and sustained retail demand.
The beat was the eighteenth straight from Malibu, who hasn’t missed on EPS since 2016. The company will look to beat again, when it reports on February 9th.
Estimates
Over the last 30 days, earnings estimates have jumped higher. For the next quarter, we have seen estimates raised by 10%, from $1.41 to $1.56. For the current year, we have seen a 11% move higher in that same time frame.
Numbers are likely headed higher as the recreational marine industry is seeing some positive trends. According to Statistical Surveys, new boat registrations for December 2020 increased 37% year over year, with total registrations rising 13% y/y.
Positive tailwinds in the industry include stimulus, a rising stock market and the post-pandemic need to get out, all whcih could help boost the quarter.
The Technicals
The stock hit a low of $18.02 during the March COVID panic and bounced to the $50 level, where it chopped around for most of the year. Since the earnings report in November, the stock has grinded higher to the $75 level, recently topping out above $80.
Malibu investors now must wait for earnings as the stock sits near all-time highs. For investors looking to buy the dip, the 21-day MA is $69, while the 50-day is $64. A larger move lower would find support at the $53.50 level, where the 200-day resides.
For those that like Fibonacci levels, the 161.8% target was already hit at $73. However, the next aggressive spot to look for, which is the 261.8% Fib level, is at $107.
Bottom Line
The pent-up demand that will hit this summer after the worst of COVID has past will be massive. People will want to be out on that lake and in their boat. Considering stimulus, easy money and the urge to get on the water, Malibu is well position to see success for the rest of the year.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
AccessZacks Top 10 Stocks for 2021 today >>