MCFT - Embedded Expectations Analysis - 2019 08 02
MasterCraft Boat Holding Inc. (MCFT:USA) currently trades at the lower end of historical averages relative to UAFRS-based (Uniform) Earnings with a 7.2x Uniform P/E, implying bearish expectations for the firm. Management appear to be concerned about profitability, dealer inventories and growth, and around their credit.Valens' qualitative analysis of the firm's Q3 2019 earnings call highlights that management may be overstating how well they are managing the marketplace to better control both the consumer and seller experience. Moreover, management may be concerned by the company's ability to drive efficiency going forward. They may also not be confident about sustaining their net income growth, and may be downplaying concerns about opex expansion.
Management also appear to be downplaying concerns about their distribution channels, in terms of dealer inventory levels, and they may be overstating their ability to drive growth through bringing new brands on with existing distribution points. Lastly, management may be overstating how confident they are about the quality of their balance sheet.
MasterCraft Boat Holdings is a holding company. Through its subsidiaries, the company is a designer, manufacturer, and marketer of recreational powerboats sold under MasterCraft, NauticStar, Crest, and Aviara brands. The company's segments include: MasterCraft, which produces MasterCraft and Aviara boats for water skiing, wakeboarding, wake surfing, and general recreational boating; NauticStar, which produces boats for saltwater fishing and general recreational boating; and Crest, which produces pontoon boats which are primarily used for general recreational boating. In addition, the company provides various accessories, including trailers and aftermarket parts.
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