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Holley (HLLY)
NYSE:HLLY
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Holley
(NYSE:HLLY)
Rating:56Neutral
Price Target:
$2.50
▲(10.62%Upside)
Positive Factors
Market Share
Holley captured market share in Q1.
Operational Efficiency
Operational efficiencies are supporting expectations for a 20%-plus EBITDA margin for the full year and healthy free cash flow, despite weak industry demand.
Sales Performance
Holley Performance Brands delivered Q1 results that beat expectations on the top-line, with sales approximately 3% above consensus.
Negative Factors
Consumer Demand
Momentum is expected to slow amid tariff uncertainties and softening consumer sentiment.
Discretionary Spending
Concerns exist around a pullback in discretionary spend and the likelihood that management may need to bring down the full-year guide.
Tariff Impact
Shares are down some 9% as investors were likely looking for more clarity around the impact of tariffs and the company’s sourcing exposure by country.
Holley (HLLY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$269.14M
Dividend YieldN/A
Average Volume (3M)476.29K
Price to Earnings (P/E)18.6
Beta (1Y)1.33
Revenue Growth-7.66%
EPS Growth-227.74%
CountryUS
Employees1,467
SectorConsumer Cyclical
Sector Strength60
IndustryAuto - Parts
Share Statistics
EPS (TTM)0.02
Shares Outstanding119,086,890
10 Day Avg. Volume686,599
30 Day Avg. Volume476,294
Financial Highlights & Ratios
PEG Ratio-0.01
Price to Book (P/B)0.60
Price to Sales (P/S)0.00
P/FCF Ratio-634.71
Enterprise Value/Market Cap3.26
Enterprise Value/Revenue0.36
Enterprise Value/Gross Profit3.45
Enterprise Value/Ebitda3.21
Forecast
1Y Price Target
$3.33Price Target Upside47.35% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Holley Business Overview & Revenue Model
Company DescriptionHolley Inc. designs, manufactures, and markets automotive aftermarket products for car and truck enthusiasts in the United States, Canada, Europe, and China. The company's products include carburetors, fuel pumps, fuel injection systems, nitrous oxide injection systems, superchargers, exhaust headers, mufflers, distributors, ignition components, engine tuners, automotive performance plumbing products, and exhaust products as well as shifters, converters, transmission kits, transmissions, tuners, and automotive software. It also offers wheels, chassis and suspension products, helmets, head and neck restraints, seat belts, firesuits, and electronic control and monitoring systems. The company sells its products under the Holley, Holley EFI, APR, MSD, Flowmaster, Powerteq, Accel, and Simpson brands to retailers directly, as well as through distributors and online channel. The company was founded in 1903 and is headquartered in Bowling Green, Kentucky.
How the Company Makes MoneyHolley Inc. generates revenue primarily through the sale of its high-performance automotive aftermarket products. The company's revenue streams include direct sales to consumers via its online platform and retail locations, as well as wholesale distribution to automotive parts retailers and specialty shops. Holley also leverages partnerships with racing teams and automotive brands to enhance its market presence and drive brand loyalty. Additionally, the company invests in marketing and promotional activities aimed at automotive enthusiasts, which helps to maintain a strong customer base and stimulate sales growth. Key factors contributing to Holley's earnings include its diverse product portfolio, strong brand reputation, and strategic market positioning within the automotive aftermarket industry.
Holley Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 9.18%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive developments in terms of growth, operational improvements, and strategic initiatives, alongside challenges in free cash flow and uncertainties related to tariffs. While growth in the core business and direct-to-consumer channels was notable, the negative cash flow and tariff impact were significant concerns.Q1-2025 Updates
Positive Updates
Core Business Growth
For the first time in five quarters, growth in the core business across direct-to-consumer and business-to-business channels was achieved, highlighting a 3.3% growth across all divisions.
Direct-to-Consumer Channel Expansion
Significant growth in the direct-to-consumer channel with over a 10% increase, particularly driven by third-party platforms like Amazon and eBay, which experienced growth of over 50%.
Operational Efficiency Improvements
Gross margin improved to 41.9% due to enhanced labor and overhead efficiencies and a reduction in warranty costs. Operational efficiency improvements led to over $1 million savings year-over-year.
New Product Launches
Product innovation contributed significantly, with $8.1 million in revenue for the quarter and successful launches like the Sniper 2 EFI HyperSpark bundles and NOS Octane Booster.
Strategic Initiatives Driving Revenue
Strategic initiatives drove $15 million in revenue and achieved $3.1 million in cost reductions.
Negative Updates
Free Cash Flow Decline
Free cash flow was negative $10.8 million, a decrease of $28.6 million compared to the prior year, driven by increased accounts receivables and normalized accounts payable balances.
Tariff Impact and Challenges
The fluid tariff situation posed challenges, necessitating comprehensive plans for cost management and tariff mitigation, with uncertainty on the impact of tariffs on the business.
Decline in Net Income
Net income for the first quarter decreased to $2.8 million from $3.7 million in the first quarter of 2024.
Company Guidance
During Holley's first quarter 2025 earnings call, the company provided guidance for the full year 2025, indicating an expected revenue range of $580 million to $600 million, which implies approximately a 2.5% growth over the core business base of roughly $575 million in 2024. The adjusted EBITDA for the year is anticipated to be between $113 million and $130 million. Despite challenging macroeconomic conditions, including impacts from tariffs and consumer sentiment fluctuations, Holley reported a 3.3% revenue growth in its core business for the first quarter, with notable improvements in gross margins to 41.9% and an adjusted EBITDA margin increase of 460 basis points to 17.8%. The company emphasized its strategic initiatives, including cost reductions and pricing strategy, which contributed $15 million in revenue and $3.1 million in cost savings for the quarter. Holley also noted significant growth in its direct-to-consumer channel, especially on third-party platforms like Amazon and eBay, and maintained its commitment to operational excellence and strategic growth initiatives throughout 2025.Holley Financial Statement Overview
Summary
Holley's financial performance is mixed, with significant challenges in profitability and revenue growth, as indicated by the income statement. The balance sheet benefits from a debt-free status, enhancing stability, but asset and equity declines pose risks. Cash flow management shows resilience in generating free cash flow, although reduced operating cash flow is a concern. Overall, while there are strengths in the financial structure, operational performance and growth appear constrained.Income Statement
Holley's income statement shows a decline in revenue over the TTM period, with a significant decrease in net income, resulting in a negative net profit margin. The gross profit margin remains relatively stable, but operating margins have contracted. The revenue growth rate is negative compared to the previous year, indicating challenges in sales performance. Overall, profitability is under pressure, affecting the score negatively.45
Neutral
Balance Sheet
The balance sheet reflects a strong equity position with no total debt in the TTM period, improving the debt-to-equity ratio significantly. The equity ratio is relatively healthy, indicating a stable financial structure. However, the decrease in total assets and stockholders' equity compared to the previous year highlights potential concerns over asset management and shareholder value.65
Positive
Cash Flow
Cash flow from operations has decreased compared to the previous year, but the company maintains positive free cash flow. The free cash flow to net income ratio is favorable, indicating efficient cash generation relative to earnings. However, the overall cash position is weakened by declining operating cash flow, impacting the score moderately.55
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 596.63M | 602.22M | 659.70M | 688.41M | 692.85M | 504.18M |
| Gross Profit | 254.01M | 238.54M | 256.09M | 253.66M | 286.81M | 208.24M |
| EBITDA | 29.38M | 55.20M | 117.51M | 148.95M | 152.47M | 104.42M |
| Net Income | -24.15M | -23.23M | 19.18M | 73.77M | -27.14M | 32.86M |
Balance Sheet | ||||||
| Total Assets | 1.14B | 1.13B | 1.20B | 1.25B | 1.19B | 1.07B |
| Cash, Cash Equivalents and Short-Term Investments | 39.07M | 56.09M | 41.08M | 26.15M | 36.33M | 71.67M |
| Total Debt | 0.00 | 557.91M | 615.46M | 655.67M | 637.67M | 674.99M |
| Total Liabilities | 719.58M | 712.17M | 762.19M | 833.65M | 888.57M | 824.95M |
| Stockholders Equity | 424.58M | 421.15M | 441.15M | 415.99M | 304.49M | 240.38M |
Cash Flow | ||||||
| Free Cash Flow | 8.65M | 40.09M | 82.16M | -390.00K | 6.71M | 78.93M |
| Operating Cash Flow | 20.21M | 46.90M | 88.09M | 12.31M | 21.58M | 88.41M |
| Investing Cash Flow | -4.63M | 2.02M | -4.45M | -25.04M | -134.09M | -165.62M |
| Financing Cash Flow | -19.31M | -34.60M | -69.01M | 2.85M | 77.16M | 140.54M |
Holley Technical Analysis
Neutral
2.26
Price Trends
2.08
Positive
2.31
Negative
2.60
Negative
Market Momentum
0.02
Negative
62.12
Neutral
87.51
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HLLY, the sentiment is Neutral. The current price of 2.26 is above the 20-day moving average (MA) of 2.09, above the 50-day MA of 2.08, and below the 200-day MA of 2.60, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 62.12 is Neutral, neither overbought nor oversold. The STOCH value of 87.51 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HLLY.
Holley Risk Analysis
Holley disclosed 57 risk factors in its most recent earnings report. Holley 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 0 New Risks
Holley Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $734.83M | 12.92 | 9.00% | 3.71% | 13.53% | -4.76% | |
79 Outperform | $727.62M | 11.62 | 26.52% | 3.76% | 1.14% | 127.04% | |
78 Outperform | $291.68M | 14.14 | 9.91% | ― | 5.54% | 398.82% | |
65 Neutral | $240.81M | ― | -7.17% | ― | 5.53% | 60.54% | |
62 Neutral | $16.85B | 11.50 | -7.38% | 2.96% | 1.59% | -23.36% | |
56 Neutral | $269.14M | 18.60 | -5.55% | ― | -7.66% | -227.74% | |
41 Neutral | $4.57M | ― | -80.07% | ― | -3.63% | 36.19% |
* Consumer Cyclical Sector Average
Performance Comparison
HLLY
Holley
2.26
-1.14
-33.53%
PLOW
Douglas Dynamics
31.35
10.50
50.36%
MPAA
Motorcar Parts Of America
12.39
6.51
110.71%
SMP
Standard Motor Products
33.43
7.55
29.17%
STRT
Strattec Security
69.98
46.13
193.42%
SSUP
Superior Industries International
0.15
-2.97
-95.19%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.