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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 -55% over the last two months and are projected to fall -73% YoY to just $0.51 per share. FY24 earnings estimates have been lowered by -13% and are expected to fall -42% YoY.
Top-line growth is expected tank in the coming year. Current quarter sales are expected to decline -35% YoY to $220 million and FY24 by -21% to $1.1 billion.
Image Source: Zacks Investment Research
Technicals
Although MBUU stock has rallied off its recent lows, I think it is setting up for another leg lower.
MBUU stock traded into a level of resistance which has held the stock down all year. Unless the stock can move meaningfully above the $56 level, I think sellers will step up again. Alternatively, if the MBUU stock can move above this downtrend, it may signal that expectations have bottomed and so too has the stock.
Image Source: TradingView
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 -55% over the last two months and are projected to fall -73% YoY to just $0.51 per share. FY24 earnings estimates have been lowered by -13% and are expected to fall -42% YoY.
Top-line growth is expected tank in the coming year. Current quarter sales are expected to decline -35% YoY to $220 million and FY24 by -21% to $1.1 billion.
Image Source: Zacks Investment Research
Technicals
Although MBUU stock has rallied off its recent lows, I think it is setting up for another leg lower.
MBUU stock traded into a level of resistance which has held the stock down all year. Unless the stock can move meaningfully above the $56 level, I think sellers will step up again. Alternatively, if the MBUU stock can move above this downtrend, it may signal that expectations have bottomed and so too has the stock.
Image Source: TradingView
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.