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Product Innovation to Aid Malibu Boats' (MBUU) Q1 Earnings

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Malibu Boats, Inc. (MBUU - Free Report) is scheduled to report first-quarter fiscal 2019 results on Nov 6, before the market opens.

The company’s operational excellence, solid product development, and efficient sales and marketing led it to witness revenue and earnings growth in the fourth quarter of fiscal 2018. The trend is likely to have continued in the first quarter of fiscal 2019 as well, driven by strong performance at Malibu and Cobalt.

Given a diversified product portfolio and competitive advantage, shares of Malibu Boats have gained 30.6% in the past year, outperforming the industry’s rally of 1.6%.


Let’s see how the company’s top and bottom line would look like in the fiscal first quarter.

Top Line to Gain

Malibu Boats has been gaining from strong channel inventories and innovation in product lines. Backed by a favorable U.S. economy, the company witnessed 84.6% year-over-year sales growth in the fiscal fourth quarter. We believe that continual product launch, and strength in bookings and orders are likely to have bolstered the top line in the fiscal first quarter as well.

Subsequently, the Zacks Consensus Estimate for revenues in the fiscal first quarter is pegged at $114.1 million, reflecting 10.2% growth from the year-ago quarter.

How Will the Bottom Line Fare

In the fiscal fourth quarter, Malibu Boats saw 76.7% year-over-year growth in adjusted earnings. We believe that the company’s sales-building initiatives, coupled with margin enhancement efforts, are likely to more than offset inflationary cost pressures and boost earnings in the to-be-reported quarter as well.

The company has been combating increased costs through vertical integration and operating efficiencies, which are likely to have aided bottom-line growth in the fiscal first quarter. Consequently, the consensus estimate pegs first-quarter earnings at 55 cents, suggesting 31% growth from the year-ago quarter.

What the Zacks Model Unveils

Our proven model shows that Malibu Boats is not likely to beat earnings estimates this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

SeaWorld has an Earnings ESP of 0.00% and a Zacks Rank #1, which doesn’t increase the likelihood of a beat.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are some stocks from the Consumer Discretionary sector that investors may consider as our model shows that these have the right combination of elements to post an earnings beat in the to-be-reported quarter:

SeaWorld (SEAS - Free Report) has an Earnings ESP of +7.75% and a Zacks Rank #1. The company is scheduled to report quarterly numbers on Nov 5.

Activision Blizzard (ATVI - Free Report) has an Earnings ESP of +1.75% and a Zacks Rank #3. The company is slated to report quarterly numbers on Nov 8.

Discovery Communications (DISCA - Free Report) currently has a Zacks Rank #3 and an Earnings ESP of +11.90%. The company is scheduled to report quarterly numbers on Nov 8.

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