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Fox Factory Holding (FOXF)
NASDAQ:FOXF

Fox Factory Holding (FOXF) AI Stock Analysis

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Fox Factory Holding

(NASDAQ:FOXF)

Rating:55Neutral
Price Target:
$26.00
▼(-1.37%Downside)
The overall stock score reflects significant financial challenges despite positive cash flow and short-term technical trends. The negative P/E ratio and lack of dividends limit valuation appeal. Earnings call insights underscore growth but highlight substantial financial setbacks. Investors should consider these factors when evaluating potential investment risks and opportunities.
Positive Factors
Cost reduction and margin improvement
Gross margin increased due to cost reduction initiatives, despite lower end consumer demand.
Market diversification
Marucci continued to provide diversification benefit in Q4 as SSG also saw tailwinds from early signs of improving conditions within bike as inventories are 'better in control'.
New product innovation
FOXF is excited about new product innovation launches, including a fork and shock that should begin to contribute and help drive growth.
Negative Factors
End market demand
Continued weak end market demand, particularly in bikes and powered sports, has led to a decrease in price objective due to sector multiples compression.
Retail decline
The company lowered its price objective based on a challenging end market outlook as retail continues to decline, especially in bikes and powered sports.
Stock performance pressure
FOXF shares are under pressure due to multiple quarters of disappointing outlooks and a significant year-to-date pullback.

Fox Factory Holding (FOXF) vs. SPDR S&P 500 ETF (SPY)

Fox Factory Holding Business Overview & Revenue Model

Company DescriptionFox Factory Holding Corp. is a leading designer, manufacturer, and marketer of performance-defining products and systems for customers worldwide. The company operates primarily in the bicycle and powered vehicle sectors, offering high-performance suspension products, including front forks, rear shocks, and other components for bicycles, off-road vehicles, trucks, and other powered vehicles. Fox Factory's products are known for their quality, innovation, and ability to enhance the performance of the vehicles they are integrated into.
How the Company Makes MoneyFox Factory Holding Corp. generates revenue through the sale of its high-performance suspension products and systems to a diverse customer base, including original equipment manufacturers (OEMs) and aftermarket retailers. The company serves the bicycle and powered vehicle industries, providing components that are critical for vehicle performance and user experience. Key revenue streams include sales of suspension products for mountain bikes, off-road vehicles, and trucks. Fox Factory also benefits from strategic partnerships and collaborations with leading OEMs, enhancing its market presence and driving sales. Additionally, the company invests in research and development to innovate and expand its product offerings, ensuring sustained demand and revenue growth.

Fox Factory Holding Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: 23.47%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong revenue growth and margin improvements across various segments. However, these were overshadowed by a significant goodwill impairment and associated net loss, along with ongoing challenges posed by tariffs. The balance between positive operational achievements and substantial financial setbacks suggests a cautious outlook.
Q1-2025 Updates
Positive Updates
Strong Revenue Growth
First quarter sales exceeded expectations at $355 million, representing a growth of 6.5% over the prior year.
Gross Margin Improvement
Achieved a 200 basis point sequential increase in gross margin to 30.9%.
Aftermarket Applications Group Performance
Delivered top-line growth with net sales increasing 9.9% and a sequential adjusted EBITDA margin improvement of 330 basis points.
Specialty Sports Group Growth
Net sales increased 6.6%, with strong performance in the bike business and Marucci.
Operational Efficiency
Implemented cost optimization strategies aimed at realizing $25 million in savings, with significant progress in manufacturing footprint consolidation.
Negative Updates
Goodwill Impairment
A non-cash goodwill impairment charge of $22 million impacted total operating expenses.
Net Loss
Reported a net loss of $259.7 million or negative $6.23 per diluted share, primarily due to the goodwill impairment.
Adjusted Net Income Decline
Adjusted net income decreased to $9.8 million or $0.23 per diluted share from $11.9 million or $0.29 per diluted share in the previous year.
Tariff Uncertainty
Tariffs posed significant challenges with potential gross impact estimated at $50 million for the full year.
Company Guidance
In the first quarter of fiscal year 2025, Fox Factory Holding Corp reported sales of $355 million, reflecting a 6.5% growth over the prior year. The company's adjusted earnings per share were $0.23, in line with expectations. Notably, gross margin improved by 200 basis points to 30.9%, driven by strategic cost management initiatives. Adjusted EBITDA was reported at $39.6 million, with a margin of 11.2%. The Powered Vehicles Group saw a 3.4% increase in net sales to $122.1 million, while the Aftermarket Applications Group experienced a 9.9% sales rise to $111.9 million. The Specialty Sports Group reported a 6.6% sales increase to $121 million. The company reaffirmed its full-year guidance, anticipating revenue between $1,385 million and $1,485 million and adjusted earnings per diluted share ranging from $1.60 to $2.60, despite potential tariff impacts estimated at a gross effect of $50 million annually.

Fox Factory Holding Financial Statement Overview

Summary
Fox Factory Holding is facing a challenging financial period with declining revenue and profitability impacting its income statement. While the balance sheet remains stable with low leverage, the recent reduction in equity raises concerns. Positive cash flow indicates resilience, but sustaining this requires improved profitability.
Income Statement
45
Neutral
The TTM (Trailing-Twelve-Months) results show a significant decline in profitability, with a negative EBIT and EBITDA margin indicating operational challenges. Revenue has decreased when compared to previous years, reflecting potential demand issues. The net profit margin has also turned negative, indicating losses. However, gross profit margin remains positive, suggesting that core production efficiency may still be intact.
Balance Sheet
60
Neutral
The balance sheet indicates a strong equity position with a healthy equity ratio, showing financial stability. The debt-to-equity ratio is low, suggesting low leverage and reduced financial risk. However, the substantial reduction in stockholders’ equity over the past year indicates financial strain. Return on equity has turned negative, reflecting recent net losses.
Cash Flow
55
Neutral
The company has managed to maintain positive free cash flow, indicating effective cash management despite reduced profitability. However, the operating cash flow to net income ratio is high due to low net income, and free cash flow has declined compared to previous years. This suggests potential challenges in sustaining cash flow levels if profitability does not improve.
Breakdown
TTMMar 2025Dec 2023Dec 2022Dec 2021Mar 2021
Income StatementTotal Revenue
1.42B1.39B1.46B1.60B1.30B890.55M
Gross Profit
424.56M423.58M464.81M531.34M432.33M289.55M
EBIT
-199.93M57.67M160.09M246.70M196.91M114.15M
EBITDA
-118.09M147.98M216.59M291.94M196.91M147.75M
Net Income Common Stockholders
-249.65M6.55M120.85M205.28M163.82M90.67M
Balance SheetCash, Cash Equivalents and Short-Term Investments
71.67M71.67M83.64M145.25M179.69M245.76M
Total Assets
2.23B2.23B2.24B1.62B1.52B1.29B
Total Debt
721.74M721.74M757.64M210.31M378.45M389.59M
Net Debt
650.07M650.07M674.00M65.06M198.77M143.82M
Total Liabilities
1.03B1.03B1.02B496.95M621.65M567.39M
Stockholders Equity
1.20B1.20B1.22B1.12B894.08M719.17M
Cash FlowFree Cash Flow
82.20M87.79M131.89M143.39M10.44M25.97M
Operating Cash Flow
123.16M131.83M178.74M187.09M65.29M82.72M
Investing Cash Flow
-68.17M-76.29M-750.40M-44.73M-106.73M-388.52M
Financing Cash Flow
-56.09M-67.33M508.98M-179.14M-24.10M506.72M

Fox Factory Holding Technical Analysis

Technical Analysis Sentiment
Positive
Last Price26.36
Price Trends
50DMA
22.77
Positive
100DMA
24.69
Positive
200DMA
30.28
Negative
Market Momentum
MACD
0.92
Negative
RSI
63.03
Neutral
STOCH
86.52
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FOXF, the sentiment is Positive. The current price of 26.36 is above the 20-day moving average (MA) of 25.17, above the 50-day MA of 22.77, and below the 200-day MA of 30.28, indicating a neutral trend. The MACD of 0.92 indicates Negative momentum. The RSI at 63.03 is Neutral, neither overbought nor oversold. The STOCH value of 86.52 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FOXF.

Fox Factory Holding Risk Analysis

Fox Factory Holding disclosed 64 risk factors in its most recent earnings report. Fox Factory Holding reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
Our cost optimization efforts may not succeed or may be significantly delayed, which may impact our ability to deliver improved margins. Q4, 2024

Fox Factory Holding Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$640.12M10.2026.52%4.28%1.14%127.04%
77
Outperform
$1.00B21.3522.48%8.37%-1.37%
SMSMP
73
Outperform
$642.07M11.319.00%4.11%13.53%-4.76%
71
Outperform
$842.47M16.997.74%-0.51%9.10%
64
Neutral
$1.32B805.10-14.33%-5.33%-292.58%
62
Neutral
$6.94B11.292.95%3.87%2.70%-24.49%
55
Neutral
$1.09B128.36-23.41%1.26%-435.73%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FOXF
Fox Factory Holding
26.47
-18.12
-40.64%
PLOW
Douglas Dynamics
27.81
4.04
17.00%
SMP
Standard Motor Products
29.62
1.28
4.52%
THRM
Gentherm
27.05
-26.71
-49.68%
ADNT
Adient
15.70
-12.18
-43.69%
XPEL
XPEL
36.61
-2.53
-6.46%

Fox Factory Holding Corporate Events

Executive/Board ChangesShareholder Meetings
Fox Factory Holding Holds Annual Meeting, Elects Directors
Neutral
May 9, 2025

On May 9, 2025, Fox Factory Holding held its Annual Meeting, where stockholders elected Thomas E. Duncan and Jean H. Hlay as Class III directors for a three-year term ending in 2028. Additionally, the appointment of Grant Thornton LLP as independent public accountants for fiscal year 2025 was ratified, and the executive compensation package was approved on an advisory basis.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.