Polaris Inc. PII is an off-road automobiles star dealing with a “difficult retail setting all through the remainder of 2024 and into subsequent 12 months.”
Polaris fell in need of our Q3 earnings estimate in late October and its EPS outlook has tanked during the last 12 months.
The Fundamentals of Polaris Inventory
Polaris is likely one of the kings of off-road automobiles with a rising attain on the road and the water. The corporate’s portfolio contains all-terrain off-road automobiles comparable to side-by-sides and ATVs. Polaris’ Indian Bike and Slingshot segments will be discovered on roads and highways.
Polaris additionally makes snowmobiles and boats, together with industry-leading Bennington pontoon boats. Polaris sells to common customers in addition to business prospects and authorities and protection consumers.
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Polaris grew its income at a relatively spectacular clip during the last 15 years outdoors of some pullbacks. The corporate went on an enormous run in 2021 and 2022 as customers flush with money flocked to its choices. Polaris did one other 4% gross sales progress in 2023, following 16% and 18%, respective expansions the prior two years.
However the firm is projected to see its gross sales slide 21% YoY in 2024 to dip beneath its 2021 whole at $7.11 billion. Polaris can be anticipated to see its adjusted earnings sink by 65% YoY in 2024. PII’s FY24 consensus estimate has fallen 65% within the final 12 months with its FY25 estimate 63% decrease.
Polaris missed our Q3 EPS estimate by 16% and supplied downbeat steering. PII’s general downward earnings revisions assist it earn a Zacks Rank #5 (Robust Promote). “As client confidence and retail demand stay difficult, we now have maintained our give attention to managing seller stock and delivering higher operational effectivity,” CEO Mike Speetzen mentioned in ready remarks.
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“A wholesome seller community is likely one of the vital elements to our long-term success, which is why we now have anchored our present manufacturing and cargo plans to our purpose of reducing seller stock by 15 to twenty % by the top of the 12 months, and I’m inspired by the progress being made. We count on a difficult retail setting all through the remainder of 2024 and into subsequent 12 months.”
Time to Keep away from Polaris Inventory?
Polaris inventory has fallen 60% within the final 10 years whereas its Auto-Tires-Vehicles sector climbed 45%. PII shares are down 28% YTD and buying and selling solidly beneath their long-term 200-week shifting common.
A backside is perhaps in for Polaris quickly. However buyers is perhaps safer ready for indicators {that a} turnaround is underway at Polaris earlier than they think about shopping for.
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Polaris Inc. (PII) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.
