Holley (HLLY) AI Stock Analysis

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Holley

(NYSE:HLLY)

Rating:54Neutral

Price Target:

$2.50

▲(17.92%Upside)

Holley's overall stock score reflects a mix of strengths and challenges. The company's strong balance sheet and strategic initiatives offer potential for recovery, but significant issues such as declining profitability, negative cash flow, and valuation concerns weigh heavily. While there are positive signals from recent earnings guidance and operational improvements, the stock remains under pressure from macroeconomic challenges and its current technical outlook.

Positive Factors

Market Position

Recent share gains and operational improvements should position the company well for accelerated sales and earnings gains as the industry normalizes.

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.

Negative Factors

Consumer Demand

The stock looks attractively priced on the face of it, but any headwinds from falling consumer demand or margin pressure from tariffs will be levered.

Tariff Uncertainty

Momentum is expected to slow amid tariff uncertainties and softening consumer sentiment.

Holley (HLLY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$252.46M

Dividend YieldN/A

Average Volume (3M)523.08K

Price to Earnings (P/E)18.6

Beta (1Y)1.32

Revenue Growth-7.66%

EPS Growth-227.74%

CountryUS

Employees1,467

SectorConsumer Cyclical

Sector Strength62

IndustryAuto - Parts

Share Statistics

EPS (TTM)0.02

Shares Outstanding119,086,890

10 Day Avg. Volume379,062

30 Day Avg. Volume523,083

Financial Highlights & Ratios

PEG Ratio0.04

Price to Book (P/B)0.53

Price to Sales (P/S)0.00

P/FCF Ratio5.43

Enterprise Value/Market Cap2.89

Enterprise Value/Revenue0.29

Enterprise Value/Gross Profit3.06

Enterprise Value/Ebitda2.07

Forecast

1Y Price Target

$3.33

Price Target Upside57.08% 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 parts and accessories. The company markets its products directly to consumers via its e-commerce platform and through a network of independent distributors and retailers. Key revenue streams include sales from its performance products like carburetors and fuel systems, which are popular among car enthusiasts looking to enhance vehicle performance. Additionally, Holley has established partnerships with automotive racing teams and events, which help to bolster its brand reputation and visibility within the racing community. This, in turn, drives sales growth. The company also benefits from a diverse portfolio of brands under its umbrella, allowing it to reach a wide range of customers across different segments of the automotive aftermarket industry.

Holley Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 2.42%|

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

Neutral

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.

Balance Sheet

Positive

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.

Cash Flow

Neutral

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
602.22M	659.70M	688.41M	692.85M	504.18M
	Gross Profit
238.54M	256.09M	253.66M	286.81M	208.24M
	EBIT
14.67M	94.04M	50.74M	126.98M	85.45M
	EBITDA
55.20M	117.51M	148.95M	152.47M	104.42M
	Net Income Common Stockholders
-23.23M	19.18M	73.77M	-27.14M	32.86M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
56.09M	41.08M	26.15M	36.33M	71.67M
	Total Assets
1.13B	1.20B	1.25B	1.19B	1.07B
	Total Debt
557.91M	615.46M	655.67M	637.67M	674.99M
	Net Debt
501.82M	574.38M	629.52M	601.35M	603.31M
	Total Liabilities
712.17M	762.19M	833.65M	888.57M	824.95M
	Stockholders Equity
421.15M	441.15M	415.99M	304.49M	240.38M
Cash Flow		Free Cash Flow
40.09M	82.16M	-390.00K	6.71M	78.93M
	Operating Cash Flow
46.90M	88.09M	12.31M	21.58M	88.41M
	Investing Cash Flow
2.02M	-4.45M	-25.04M	-134.09M	-165.62M
	Financing Cash Flow
-34.60M	-69.01M	2.85M	77.16M	140.54M

Holley Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price2.12

Price Trends

50DMA

2.17

Negative

100DMA

2.48

Negative

200DMA

2.70

Negative

Market Momentum

MACD

-0.03

Negative

RSI

52.03

Neutral

STOCH

80.84

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 2.12 is above the 20-day moving average (MA) of 2.07, below the 50-day MA of 2.17, and below the 200-day MA of 2.70, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 52.03 is Neutral, neither overbought nor oversold. The STOCH value of 80.84 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 3 New Risks

We have identified a material weakness in our internal control over financial reporting that if not remediated could result in material misstatements in our financial statements and cause us to fail to meet our reporting and financial obligations. Q4, 2024

If we are unable to effectively adopt or react to the risks posed by and the opportunity presented by, new technology, such as artificial intelligence, machine learning, blockchain or other new approaches to data mining, we may be exposed to risks related to the adoption and application of such technology. Q4, 2024

We are exposed to political or country risk inherent in doing business in some countries, including China. Q4, 2024

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
PLOW	79 Outperform	$645.45M	10.31	26.52%	4.24%	1.14%	127.04%
STRT	79 Outperform	$226.49M	10.98	9.91%	―	5.54%	398.82%
SMP	73 Outperform	$651.08M	11.45	9.00%	4.05%	13.53%	-4.76%
MPAA	63 Neutral	$233.44M	―	-6.40%	―	4.26%	64.64%
Sector *	62 Neutral	$6.88B	11.32	2.90%	3.87%	2.70%	-24.57%
HLLY	54 Neutral	$252.46M	18.60	-5.55%	―	-7.66%	-227.74%
SUP	42 Neutral	$12.34M	―	-80.07%	―	-3.63%	36.19%

* Consumer Cyclical Sector Average

Performance Comparison

HLLY

Holley

2.12

-1.48

-41.11%

PLOW

Douglas Dynamics

27.81

4.16

17.59%

MPAA

Motorcar Parts Of America

11.92

6.72

129.23%

SMP

Standard Motor Products

29.62

1.37

4.85%

STRT

Strattec Security

54.34

26.82

97.46%

SUP

Superior Industries International

0.42

-3.03

-87.83%

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.