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Polaris (PII)
NYSE:PII
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Polaris
(NYSE:PII)
53Neutral
Positive Factors
Market Share
Polaris gained market share in mid-size motorcycles with the new Indian Scout Lineup.
Negative Factors
Earnings Guidance
PII's initial guidance for '25 came in well below expectations, with adjusted EPS expected to be significantly lower than the consensus.
Margin Performance
Weaker-than-expected margin performance is a primary driver of the lower guidance, affected by higher incentive compensation and ongoing negative plant absorption.
Polaris (PII) vs. S&P 500 (SPY)
Market Cap
$2.49B
Dividend Yield5.94%
Average Volume (3M)1.96M
Price to Earnings (P/E)22.8
Beta (1Y)1.13
Revenue Growth-19.69%
EPS Growth-77.72%
CountryUS
Employees15,000
SectorConsumer Cyclical
Sector Strength50
IndustryVehicles
Share Statistics
EPS (TTM)1.95
Shares Outstanding56,099,880
10 Day Avg. Volume1,999,865
30 Day Avg. Volume1,961,317
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.35
Price to Cash Flow (P/CF)3.00
P/FCF Ratio2.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$54.20Price Target Upside28.34% Upside
Rating ConsensusHold
Number of Analyst Covering12
Polaris Business Overview & Revenue Model
Company DescriptionPolaris Inc. engages in designing, engineering, and manufacturing powersports vehicles. The company was founded by Allen Hetteen, Edgar E. Hetteen, and David Johnson in 1954 and is headquartered in Medina, MN.
How the Company Makes MoneyPolaris generates revenue primarily through the sale of its wide range of powersports vehicles and related products. The company's key revenue streams include the sale of off-road vehicles (such as all-terrain vehicles and side-by-sides), snowmobiles, and motorcycles, as well as parts, garments, and accessories (PG&A) that complement their core product offerings. Additionally, Polaris has expanded into the marine industry, acquiring boat brands that contribute to its earnings. The company benefits from a robust dealership network, both domestically and internationally, which facilitates the distribution and sale of its products. Strategic partnerships and a focus on innovation, including advancements in electric vehicle technology, also play a significant role in Polaris's revenue generation.
Polaris Financial Statement Overview
Summary
Polaris's financial performance is challenged by declining revenues and profitability margins. The decrease in free cash flow and net income suggests potential inefficiencies and cash management issues. While the balance sheet reflects a degree of stability, the significant drop in cash flow metrics indicates areas that need improvement for better financial health.Income Statement
Polaris has shown a decline in revenue from $8.93 billion in 2023 to $7.18 billion in 2024, indicating a revenue contraction of approximately 19.4%. The gross profit margin for 2024 is 20.44%, which is a decrease from previous years, suggesting pressure on cost management. The net profit margin also decreased significantly, with net income dropping from $502.8 million in 2023 to $110.8 million in 2024. These metrics indicate challenges in maintaining profitability and growth.55
Neutral
Balance Sheet
Polaris's balance sheet shows a debt-to-equity ratio of 1.27 in 2024, which is relatively stable compared to prior years, implying manageable leverage. The equity ratio stands at 23.34%, reflecting a moderate level of financial stability. There is, however, a decline in stockholders' equity from $1.42 billion in 2023 to $1.29 billion in 2024, indicating potential concerns about equity retention and growth.62
Positive
Cash Flow
The cash flow statement reveals a significant decrease in free cash flow from $513.2 million in 2023 to $6.5 million in 2024, highlighting a considerable decline in cash generation capability. The operating cash flow to net income ratio has weakened, indicating potential inefficiencies in converting profits into cash flows. These trends raise concerns about liquidity and cash management.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 7.18B | 8.93B | 8.59B | 8.20B | 7.03B | Gross Profit |
| 1.47B | 1.96B | 1.96B | 1.94B | 1.71B | EBIT |
| 290.60M | 700.90M | 804.50M | 709.00M | 587.30M | EBITDA |
| 290.60M | 1.01B | 1.07B | 881.20M | 462.70M | Net Income Common Stockholders |
| 110.80M | 502.80M | 603.40M | 493.90M | 124.80M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 287.80M | 367.80M | 324.50M | 509.20M | 634.70M | Total Assets |
| 5.53B | 5.52B | 5.22B | 5.05B | 4.63B | Total Debt |
| 1.64B | 2.05B | 2.17B | 1.97B | 1.58B | Net Debt |
| 1.35B | 1.69B | 1.84B | 1.46B | 943.00M | Total Liabilities |
| 4.23B | 4.10B | 4.12B | 3.82B | 3.49B | Stockholders Equity |
| 1.29B | 1.42B | 1.10B | 1.22B | 1.14B |
| Cash Flow | Free Cash Flow | |||
| 6.50M | 513.20M | 202.00M | -4.60M | 804.70M | Operating Cash Flow |
| 268.20M | 925.80M | 508.60M | 293.70M | 1.02B | Investing Cash Flow |
| -270.90M | -462.00M | -324.60M | -303.90M | -150.70M | Financing Cash Flow |
| -59.20M | -431.30M | -363.20M | -107.60M | -415.40M |
Polaris Technical Analysis
Negative
42.23
Price Trends
48.93
Negative
57.64
Negative
67.98
Negative
Market Momentum
-1.04
Negative
45.08
Neutral
60.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PII, the sentiment is Negative. The current price of 42.23 is below the 20-day moving average (MA) of 44.68, below the 50-day MA of 48.93, and below the 200-day MA of 67.98, indicating a bearish trend. The MACD of -1.04 indicates Negative momentum. The RSI at 45.08 is Neutral, neither overbought nor oversold. The STOCH value of 60.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PII.
Polaris Risk Analysis
Polaris disclosed 26 risk factors in its most recent earnings report. Polaris reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Polaris Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $3.23B | 7.54 | 14.19% | 2.69% | -11.13% | -31.78% | |
65 Neutral | $3.78B | 29.76 | 7.50% | 2.94% | -18.19% | -68.10% | |
64 Neutral | $289.32M | ― | -1.53% | ― | -45.70% | -115.77% | |
62 Neutral | $4.19B | 20.90 | 5.13% | 2.49% | -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
PII
Polaris
42.23
-44.82
-51.49%
BC
Brunswick
56.22
-26.96
-32.41%
HOG
Harley-Davidson
24.48
-15.17
-38.26%
THO
Thor Industries
76.77
-22.21
-22.44%
MCFT
MasterCraft Boat Holdings
17.17
-3.67
-17.61%
DOOO
BRP
39.56
-22.15
-35.89%
Polaris Earnings Call Summary
Earnings Call Date: Jan 28, 2025 | % Change Since: -24.16% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Negative
The earnings call reflects a challenging year for Polaris with significant revenue declines, particularly in the snow and motorcycle segments, which were impacted by external factors like weather and competitive promotions. While there are achievements in new product innovations and operational efficiencies, these highlights were overshadowed by the financial pressures and market challenges faced in 2024. The outlook for 2025 remains cautious with anticipated continued challenges in key segments.Highlights
New Product Innovations
Polaris concluded 2024 with a robust portfolio of new product innovations, including the new Indian Motorcycle Scout lineup, RZR Pro lineup, quality improvements in Ranger, and new boats from Bennington and Hurricane.
Lean and Operational Efficiencies
Polaris realized over $200 million in structural savings in 2024 and identified additional opportunities for 2025 and beyond, contributing to operational efficiencies.
Positive Youth Segment Performance
Youth and recreational retail was up strong double digits in the fourth quarter due to a positive holiday selling season and favorable comparisons to last year.
Innovation in Marine Segment
Positive feedback has been received for the innovation in the Marine segment, with new products like the redesigned helms in Bennington pontoons and the new Series M.
Lowlights
Significant Revenue Decline
Fourth quarter sales declined 23% compared to last year, primarily due to a decision to actively reduce dealer inventory by shipping less product to dealers.
Snow Sales and Retail Drop
Snow sales and retail were both down over 30% versus the prior year due to a lack of snow across many important regions for trail riders.
Challenges in Motorcycle Segment
On-Road sales during the quarter were down 21%, with ongoing softness in the heavyweight segment and elevated competitive promotions impacting sales.
Marine Segment Pressure
The pontoon industry was down 11% in 2024, resulting in lower sales and elevated inventory levels that need to be addressed in 2025.
Negative Absorption and Margins
The company faced negative absorption from lower production levels and pressures on EBITDA margins from higher promotional environments and negative mix.
Lowered 2025 Guidance
Polaris expects sales to be slightly lower than last year, with continued strength of the U.S. dollar and lower expected shipment volumes as major factors.
Company Guidance
During the Polaris Fourth Quarter 2024 Earnings Call, the company provided guidance for 2025, expecting sales to decline slightly due to lower shipment volumes and a strong U.S. dollar. The company's EBITDA margin is anticipated to drop by 170 to 200 basis points, attributed to increased costs, including the reset of their employee profit-sharing program, unfavorable product mix, and negative absorption resulting from lower production targets. Despite these challenges, Polaris projects an adjusted EPS of approximately $1.10 for 2025, reflecting efforts to manage dealer inventory efficiently and focus on innovation. The company plans to generate about $350 million in adjusted free cash flow by reducing finished goods inventory and lowering capital expenditures. Their strategic initiatives aim to position Polaris for stronger incremental margins and improved profitability as the market recovers.Polaris Corporate Events
Executive/Board Changes
Polaris Announces Leadership Changes with Eastman’s Retirement
Neutral
Nov 22, 2024
Polaris Inc. will see a leadership change as Stephen L. Eastman, the President of Parts, Garments, and Accessories, plans to retire at the end of 2024. Following his retirement announcement, Eastman’s roles will be redistributed among other company leaders starting January 2025, while he transitions to a strategic advisory role until December 2025, maintaining his current compensation.
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.