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Harley-Davidson (HOG)
NYSE:HOG
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Harley-Davidson
(NYSE:HOG)
68Neutral
Positive Factors
Product Innovation
The launch of new model year 2025 motorcycles, including a significant refresh of the cruiser category, is expected to provide a pricing lift for Harley-Davidson.
Valuation
Analyst sees upside vs. other powersports peers given attractive valuation and likely retail outperformance as HOG has now significantly refreshed ~80% of its motorcycles over the past two years.
Negative Factors
Financial Performance
HOG reported a 4Q24 GAAP loss per share of $0.93, well short of the Street’s estimate.
Harley-Davidson (HOG) vs. S&P 500 (SPY)
Market Cap
$3.23B
Dividend Yield2.69%
Average Volume (3M)2.74M
Price to Earnings (P/E)7.5
Beta (1Y)1.22
Revenue Growth-11.13%
EPS Growth-31.78%
CountryUS
Employees6,400
SectorConsumer Cyclical
Sector Strength50
IndustryVehicles
Share Statistics
EPS (TTM)3.33
Shares Outstanding124,536,850
10 Day Avg. Volume2,960,672
30 Day Avg. Volume2,744,976
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.62
Price to Cash Flow (P/CF)6.10
P/FCF Ratio4.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$30.29Price Target Upside23.73% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
Harley-Davidson Business Overview & Revenue Model
Company DescriptionHarley-Davidson, Inc. is engaged in the manufacture and sale of custom, cruiser and touring motorcycles. It operates through the following segments: Motorcycles & Related Products; and Financial Services. The Motorcycles & Related Products segment manufactures, designs, and sells at wholesale on-road Harley-Davidson motorcycles as well as motorcycle parts, accessories, general merchandise, and related services. The Financial Services segment comprises of financing and servicing wholesale inventory receivables and retail consumer loans, primarily for the purchase of Harley-Davidson motorcycles. The company was founded by William Sylvester Harley, Arthur Davidson, Walter C. Davidson, Sr. and William A. Davidson in 1903 and is headquartered in Milwaukee, WI.
How the Company Makes MoneyHarley-Davidson generates revenue primarily through the sale of motorcycles and related products. The company's key revenue streams include motorcycle sales, parts and accessories, and general merchandise. Motorcycle sales account for the majority of its revenue, driven by the iconic Harley-Davidson brand and a diverse lineup of cruiser, touring, and custom bikes. The company also earns from the sale of parts and accessories, which allow customers to personalize and maintain their motorcycles. Additionally, Harley-Davidson markets lifestyle apparel and merchandise under its brand. The company has established a strong dealer network to facilitate sales and services and leverages strategic partnerships to expand its reach globally. Financial services, including motorcycle financing and insurance, also contribute to its earnings, enhancing customer accessibility to Harley-Davidson products.
Harley-Davidson Financial Statement Overview
Summary
Harley-Davidson demonstrates moderate financial health with stable profitability and strong cash flow generation. While the balance sheet shows high leverage, which is typical for the industry, the company maintains a solid return on equity. Strategic focus on reducing debt and enhancing revenue growth could further strengthen its financial position.Income Statement
Harley-Davidson has experienced fluctuating revenue growth, with a noticeable dip in the most recent year. The gross profit margin and net profit margin have been relatively stable, indicating a consistent cost structure. However, the decline in revenue growth and EBIT margin suggest some operational challenges. Overall, the income statement reflects moderate profitability with room for improvement in growth.68
Positive
Balance Sheet
The company maintains a high debt-to-equity ratio, which poses a risk but is common in the vehicles industry. The return on equity is healthy, indicating good profitability relative to shareholder investments. The equity ratio has been improving, showing a stronger capital structure over time. Overall, the balance sheet reveals financial stability but highlights the need to manage debt levels.72
Positive
Cash Flow
Harley-Davidson's cash flow statements indicate strong operating cash flow, with an improving free cash flow trend over recent years. The operating cash flow to net income ratio is robust, reflecting efficient cash generation relative to earnings. The free cash flow to net income ratio confirms solid free cash flow availability for reinvestment or debt reduction. Overall, cash flow management appears strong, but strategic reinvestment is essential for future growth.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 5.19B | 5.84B | 5.76B | 5.34B | 4.05B | Gross Profit |
| 1.81B | 1.79B | 2.35B | 1.71B | 1.02B | EBIT |
| 416.63M | 779.08M | 909.28M | 823.44M | 62.18M | EBITDA |
| 708.56M | 1.06B | 1.11B | 999.46M | 323.24M | Net Income Common Stockholders |
| 455.36M | 706.59M | 741.41M | 650.02M | 1.30M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.59B | 1.53B | 1.43B | 1.87B | 3.26B | Total Assets |
| 11.88B | 12.14B | 11.49B | 11.05B | 12.01B | Total Debt |
| 2.54B | 7.20B | 6.91B | 6.89B | 8.99B | Net Debt |
| 949.53M | 5.66B | 5.48B | 5.01B | 5.73B | Total Liabilities |
| 8.72B | 8.89B | 8.59B | 8.50B | 10.29B | Stockholders Equity |
| 773.38M | 3.25B | 2.91B | 2.55B | 1.72B |
| Cash Flow | Free Cash Flow | |||
| 867.27M | 547.48M | 396.79M | 855.52M | 1.05B | Operating Cash Flow |
| 1.06B | 754.89M | 548.46M | 975.70M | 1.18B | Investing Cash Flow |
| -383.33M | -512.30M | -773.01M | -459.45M | -66.78M | Financing Cash Flow |
| -572.32M | -174.65M | -201.97M | -1.88B | 1.37B |
Harley-Davidson Technical Analysis
Negative
24.48
Price Trends
27.19
Negative
29.86
Negative
32.45
Negative
Market Momentum
-0.49
Negative
38.88
Neutral
48.98
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HOG, the sentiment is Negative. The current price of 24.48 is below the 20-day moving average (MA) of 25.85, below the 50-day MA of 27.19, and below the 200-day MA of 32.45, indicating a bearish trend. The MACD of -0.49 indicates Negative momentum. The RSI at 38.88 is Neutral, neither overbought nor oversold. The STOCH value of 48.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HOG.
Harley-Davidson Risk Analysis
Harley-Davidson disclosed 12 risk factors in its most recent earnings report. Harley-Davidson 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
Harley-Davidson Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $2.33B | 17.15 | 10.42% | 4.70% | -1.15% | 121.43% | |
68 Neutral | $3.23B | 7.54 | 14.19% | 2.69% | -11.13% | -31.78% | |
64 Neutral | $289.32M | ― | -1.53% | ― | -45.70% | -115.77% | |
62 Neutral | $4.19B | 21.79 | 5.13% | 2.39% | -8.45% | -25.41% | |
59 Neutral | $12.41B | 10.34 | 1.32% | 3.61% | 1.65% | -18.04% | |
53 Neutral | $2.49B | 22.78 | 8.18% | 5.94% | -19.69% | -77.72% |
* Consumer Cyclical Sector Average
Performance Comparison
HOG
Harley-Davidson
24.48
-15.17
-38.26%
LCII
LCI Industries
91.18
-11.62
-11.30%
PII
Polaris
44.43
-42.62
-48.96%
THO
Thor Industries
78.44
-20.54
-20.75%
MCFT
MasterCraft Boat Holdings
17.38
-3.46
-16.60%
DOOO
BRP
39.56
-22.15
-35.89%
Harley-Davidson Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -8.11% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Negative
The earnings call reflects a challenging year for Harley-Davidson, with significant declines in global retail sales and financial performance. However, the company experienced growth in the US Touring segment and maintained a strong market share in electric motorcycles, alongside notable product recognition and strong cash flow generation. Despite these positive aspects, the overall sentiment is negative due to the substantial headwinds and financial losses faced by both Harley-Davidson and LiveWire.Highlights
Growth in US Touring Segment
The launch of the 2024 Street Glide and Road Glide motorcycles contributed to nearly 5% growth in the US Touring segment, driving Harley-Davidson's share to 75%, an increase of 3.5% since 2023.
Positive Customer and Industry Recognition
Cycle World voted the CVO Road Glide as the best cruiser of 2024, and Motorcycle.com voted the Street Glide as the best bagger of 2024.
Strong Cash Flow Generation
Harley-Davidson delivered over $1 billion in operating cash flow in 2024, nearly a 40% increase from the prior year.
Market Share Leadership in Electric Motorcycles
LiveWire maintained a 65% market share in the US 50+ horsepower on-road EV segment, with a 46% year-over-year growth in global retail performance.
Significant Inventory Reductions
Dealer inventories globally were down 19% sequentially relative to the end of Q3 2024, with Harley-Davidson dealer inventory levels over 4% lower year over year.
Lowlights
Decline in Global Retail Sales
Global retail sales declined by 15% in Q4 2024, with North America down 13% and other international regions down 17%. Full-year global retail sales declined by 7%.
LiveWire Operating Loss
LiveWire ended 2024 with an operating loss of $110 million, although this was within the range of revised guidance.
Reduced Financial Performance
Consolidated revenue for Q4 2024 was down 35%, and the operating loss was $193 million compared to a $21 million loss in Q4 2023.
Challenges in Key International Markets
Q4 retail sales in Asia Pacific declined by 26%, driven by weakness in Japan and China, while EMEA retail sales were down 7%, impacted by macroeconomic conditions.
Headcount Reduction
Total headcount was reduced by 7% from the end of Q4 2023 to the end of Q4 2024, including employee severance expenses.
Company Guidance
During the Harley-Davidson 2024 Fourth Quarter Investor and Analyst Conference Call, CEO Jochen Zeitz highlighted the company's guidance amidst challenging market conditions. Despite a 15% decline in global retail sales for Q4 and a 7% decline for the full year due to high interest rates and reduced consumer confidence, Harley-Davidson saw a 5% growth in the US Touring segment, capturing a 75% market share. The company's Hardwire strategy focused on profitability and innovation, leading to a 177% increase in engagements on their digital platform and a 40% increase in operating cash flow to over $1 billion. For 2025, Harley-Davidson expects flat retail sales, with improvements anticipated in the second half, and aims to achieve a double-digit operating margin by 2026. They also plan to reduce dealer inventory by over 30% in the first half of 2025 and continue cost productivity efforts, targeting an additional $100 million in savings.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.