Holley (HLLY) AI Stock Analysis

• Market Cap: $432.25M
• Dividend Yield: N/A
• Average Volume (3M): 750.92K
• Price to Earnings (P/E): 18.6
• Beta (1Y): 1.59
• Revenue Growth: -7.27%
• EPS Growth: -233.07%
• Country: US
• Employees: 1,467
• Sector: Consumer Cyclical
• Sector Strength: 75
• Industry: Auto - Parts
• EPS (TTM): 0.09
• Shares Outstanding: 119,405,914
• 10 Day Avg. Volume: 1,005,311
• 30 Day Avg. Volume: 750,916
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.78
• Enterprise Value/Revenue: 1.30
• Enterprise Value/Gross Profit: 3.00
• Enterprise Value/Ebitda: 14.13
• 1Y Price Target: $4.10
• Price Target Upside: 13.26% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 61 Neutral
• Price Target: $4.00 ▲(10.50% Upside)

Holley's overall stock score reflects a mixed outlook. The most significant factor is the company's financial performance, which is under pressure due to declining revenues and high leverage. Technical analysis shows strong bullish momentum, but overbought indicators suggest caution. Valuation is weak due to negative earnings and lack of dividends. The earnings call provides a positive outlook with strategic growth initiatives, but challenges in profitability remain.

Positive Factors

Financial Performance

Holley Performance Brands delivered Q2 results that beat expectations, with sales and adjusted EBITDA above consensus.

Market Position

Holley has increased its market position in the highly fragmented performance automotive aftermarket industry through strategic acquisitions.

Tariff Mitigation

Management seemed confident about its ability to completely offset the tariff-related margin headwinds with 60% from mitigation efforts and 40% from the 8.75% price increase in June.

Negative Factors

Consumer Confidence

Holley is straddling both the consumer enthusiast and auto supply segments—both pressured by weak consumer confidence, tighter distributor inventories, and tariff headwinds.

Inventory Management

Core product growth has been healthy, excess inventory has been cleaned out, and Management sees a level of end market stabilization forming.

Sales Outlook

The midpoint of the company's comparable sales outlook assumes a 300-basis-point deceleration from the first half, despite easier comparisons and the full benefit of price, where management indicated little push back from consumers or retailers.

Holley Business Overview & Revenue Model

Company Description

Holley 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 Money

Holley 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 Financial Statement Overview

Summary

Holley is facing challenges with declining revenue and profitability, as reflected in the income statement and negative net income. The balance sheet shows moderate leverage, but a negative ROE. Cash flow remains positive, providing some stability, but declining free cash flow growth is a concern. Overall, the company's financial position is stable but requires improvements in revenue growth and profitability.

Income Statement

Holley's income statement shows declining revenue and profitability. The TTM (Trailing-Twelve-Months) data indicates a decrease in total revenue from previous periods, with a negative net income resulting in poor net profit margins. Gross profit margins are relatively stable, but EBIT and EBITDA margins have dropped significantly compared to earlier periods, raising concerns about operational efficiency.

Balance Sheet

The balance sheet reveals a moderate debt-to-equity ratio, although total debt remains high. Stockholders' equity has seen a slight increase, improving the equity ratio. However, the overall leverage remains a concern. Return on Equity (ROE) has turned negative, reflecting recent net losses, which could impact investor confidence.

Cash Flow

Cash flow analysis shows a positive operating cash flow and free cash flow, despite declining free cash flow compared to previous years. The operating cash flow to net income ratio is healthy, indicating good cash generation relative to net income. However, the decline in free cash flow growth rate highlights potential cash management issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	593.80M	602.22M	659.70M	688.41M	692.85M	504.18M
Gross Profit	256.71M	238.54M	256.09M	253.66M	286.81M	208.24M
EBITDA	54.48M	54.10M	117.51M	148.95M	152.47M	104.42M
Net Income	-30.39M	-23.23M	19.18M	73.77M	-27.14M	32.86M
Balance Sheet
Total Assets	1.16B	1.13B	1.20B	1.25B	1.19B	1.07B
Cash, Cash Equivalents and Short-Term Investments	63.84M	56.09M	41.08M	26.15M	36.33M	71.67M
Total Debt	555.63M	557.91M	615.46M	655.67M	637.67M	674.99M
Total Liabilities	720.39M	712.17M	762.19M	833.65M	888.57M	824.95M
Stockholders Equity	437.84M	421.15M	441.15M	415.99M	304.49M	240.38M
Cash Flow
Free Cash Flow	24.84M	40.09M	82.16M	-390.00K	6.71M	78.93M
Operating Cash Flow	35.02M	46.90M	88.09M	12.31M	21.58M	88.41M
Investing Cash Flow	-16.46M	2.02M	-4.45M	-25.04M	-134.09M	-165.62M
Financing Cash Flow	-9.02M	-34.60M	-69.01M	2.85M	77.16M	140.54M

Holley Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.62
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HLLY, the sentiment is Positive. The current price of 3.62 is above the 20-day moving average (MA) of 2.63, above the 50-day MA of 2.33, and above the 200-day MA of 2.53, indicating a bullish trend. The MACD of 0.36 indicates Negative momentum. The RSI at 78.21 is Negative, neither overbought nor oversold. The STOCH value of 95.53 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HLLY.

Holley Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
STRT	78 Outperform	$314.11M	16.61	8.85%	―	5.54%	398.82%
PLOW	75 Outperform	$736.85M	11.58	25.41%	3.70%	1.47%	131.61%
SMP	74 Outperform	$861.26M	13.28	9.90%	3.19%	17.98%	9.41%
MPAA	68 Neutral	$274.80M	180.89	0.63%	―	6.59%	―
HLLY	61 Neutral	$432.25M	18.60	-6.75%	―	-7.27%	-233.07%
Sector *	61 Neutral	$17.23B	11.51	-5.97%	3.09%	1.47%	-15.79%
SSUP	43 Neutral	$2.46M	―	-80.07%	―	-8.31%	-56.03%