FOXF - Embedded Expectations Analysis - 2021 10 21
Fox Factory Holding Corp. (FOXF:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 30.6x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about supply chain constraints, the Outside Van and SOLA Sports acquisitions, and the sustainability of demand.Specifically, management may have concerns about persisting supply chain constraints and inflationary challenges, rising labor and commission costs, and the impact of the Delta variant on their business. In addition, they may be overstating the strategic importance and synergies of the Outside Van and SOLA Sports acquisitions, as well as the potential of the e-bike category. Furthermore, management may be concerned about the accuracy of their component supply and bike demand forecasts and they may lack confidence in their ability to realize pent-up bike demand and sustain adjusted EPS growth.
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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