Prior to the release of its earnings report, Polaris Industries (PII, Financial) is witnessing a significant increase in options activity, with volumes reaching 4.2 times their usual levels. Notably, put options are outpacing call options by a ratio of 6 to 1. Current implied volatility indicates that the market is expecting a fluctuation of approximately 7.7%, or $2.57, post-announcement. Historically, over the last eight quarters, the median stock movement following earnings has been about 3.2%.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 11 analysts, the average target price for Polaris Inc (PII, Financial) is $38.09 with a high estimate of $54.00 and a low estimate of $23.00. The average target implies an upside of 13.69% from the current price of $33.51. More detailed estimate data can be found on the Polaris Inc (PII) Forecast page.
Based on the consensus recommendation from 16 brokerage firms, Polaris Inc's (PII, Financial) average brokerage recommendation is currently 3.0, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Polaris Inc (PII, Financial) in one year is $87.96, suggesting a upside of 162.53% from the current price of $33.505. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Polaris Inc (PII) Summary page.
PII Key Business Developments
Release Date: January 28, 2025
- Revenue: Fourth quarter sales declined 23% compared to last year.
- Adjusted Gross Profit Margin: 21.1%, up modestly due to lean and operational efficiencies.
- Adjusted EPS: $0.92, down 54% year-over-year.
- ORV Dealer Inventory: Reduced by 16% year-over-year.
- North American Retail: Down 7% in the fourth quarter.
- Off-Road Sales: Down 25% due to lower volume and negative mix.
- On-Road Sales: Down 21%, with divergence between midsize and heavyweight segments.
- Marine Sales: Down 4% in a seasonally light quarter.
- Lean Savings: Over $250 million in savings realized in 2024.
- Adjusted Free Cash Flow: Expected to be approximately $350 million in 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Polaris Inc (PII, Financial) concluded 2024 with a robust portfolio of new product innovations, including the Indian Motorcycle Scout lineup and RZR Pro lineup.
- The company achieved over $200 million in structural savings through lean initiatives and operational efficiencies.
- Polaris Inc (PII) maintained strong relationships with dealers, reducing ORV dealer inventory by 16% year-over-year.
- The company invested over 4% of sales into R&D, showcasing commitment to innovation.
- Polaris Inc (PII) has a strong balance sheet and plans to prioritize paying down debt in 2025, aiming for improved cash generation.
Negative Points
- Polaris Inc (PII) faced a challenging retail environment, with North American retail down 7% in the fourth quarter.
- The company experienced a higher promotional environment, adding pressure to EBITDA margins.
- 2024 was marked by a prolonged down cycle in the powersports industry, impacting financial results.
- The company anticipates continued challenges in the retail environment for 2025, with shipments expected to be down in the first quarter.
- Polaris Inc (PII) faced negative absorption from lower production volumes, impacting margins.
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