FOXF - Embedded Expectations Analysis - 2020 06 24
Fox Factory Holding Corp. (FOXF:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 38.7x Uniform P/E. Even at these levels, the market has bearish expectations for the firm, and management may be concerned about sales, cash flow, and new model launchesSpecifically, management may have concerns about OEM production shifts, the pace of production restarts, and end customer demographics changes. Moreover, they may be overstating the potential of their Specialty Sports Group 2021 model launches, the strength of their liquidity position, and the benefits of relocating operations to Georgia. Meanwhile, they may be concerned about the sustainability of powered vehicles demand, 2020 vehicle model production, and their retail partners' strategy for power sports segment sales. Additionally, they may lack confidence in their ability to expand their SCA dealer base, maintain a strong order book going into Q2, and remain in compliance with their net leverage ratio covenant. Finally, they may be downplaying concerns about bike sales for the year and further economic uncertainty
Fox Factory Holding is a holding company. Through its subsidiaries, the company is a designer, manufacturer and marketer of products and systems used on bicycles, side-by-side vehicles, on-road vehicles with and without off-road capabilities, off-road vehicles and trucks, all-terrain vehicles, snowmobiles, specialty vehicles and applications, motorcycles, and commercial trucks. In its powered vehicle product categories, the company provides products under the FOX, BDS Suspension, Zone Offroad, JKS Manufacturing, RT Pro UTV, 4x4 Posi-Lok, and Tuscany brands. The company's bike product offerings are used on a range of mountain bikes and road bikes under the FOX, Race Face, Easton Cycling and Marzocchi brands.
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