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Polaris (PII)
NYSE:PII
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Polaris
(NYSE:PII)
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Rating:51Neutral
Price Target:
$67.00
▼(-4.14% Downside)
The score is held back primarily by sharply weaker profitability in 2025 (net loss and margin compression), partially offset by strong recent cash generation and debt paydown. Technicals are soft with the stock below short-term averages, while valuation is supported by the ~4% dividend but tempered by loss-driven negative P/E. Management’s 2026 improvement outlook helps, but near-term tariffs and pricing pressure remain key risks.
Positive Factors
Strong operating cash generation
Sustained large operating cash flow provides durable internal funding for capex, R&D and dividends while enabling strategic actions (debt paydown, supply chain investments). Reliable cash conversion supports financial flexibility and resilience over the next several quarters.
Meaningful debt reduction
Material deleveraging reduces interest burden and financial risk, improving the company's capacity to absorb cyclical shocks. Lower leverage enhances strategic optionality for investing in product programs and supply‑chain localization without relying heavily on external financing.
Structural manufacturing cost savings
Sustained, structural plant cost reductions and manufacturing improvements directly strengthen long‑term margin potential and competitiveness. These cost actions provide durable unit‑cost advantages that can offset commodity/tariff pressure and support margin recovery.
Negative Factors
Profitability deterioration
A swing into loss and negative EBITDA compresses retained earnings and removes operational cushion. That deterioration impairs reinvestment capacity, weakens returns on capital, and raises execution risk for strategic initiatives until margins consistently recover.
Significant tariff exposure
Large, sustained tariff costs materially raise COGS and create structural margin pressure. Policy uncertainty and multi‑year tariff impacts make profitability sensitive to sourcing shifts; mitigation timelines (China spend targets) mean the headwind persists over the medium term.
Thinner capital cushion from equity decline
Material equity erosion reduces balance‑sheet capacity to absorb shocks and limits room for opportunistic investment. A thinner capital base raises solvency and funding risks if margins or cash flow slip again, constraining strategic choices until equity is rebuilt.
Polaris (PII) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.93B
Dividend Yield3.99%
Average Volume (3M)897.87K
Price to Earnings (P/E)―
Beta (1Y)1.05
Revenue Growth-9.39%
EPS Growth-173.86%
CountryUS
Employees15,000
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Recreational Vehicles
Share Statistics
EPS (TTM)0.08
Shares Outstanding56,248,333
10 Day Avg. Volume1,368,430
30 Day Avg. Volume897,870
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)4.34
Price to Sales (P/S)0.50
P/FCF Ratio6.45
Enterprise Value/Market Cap1.32
Enterprise Value/Revenue0.72
Enterprise Value/Gross Profit3.91
Enterprise Value/Ebitda-45.47
Forecast
1Y Price Target
$70.00Price Target Upside0.16% Upside
Rating ConsensusHold
Number of Analyst Covering8
EPS Forecast (FY)1.72
Revenue Forecast (FY)$7.24B
Polaris Business Overview & Revenue Model
Company DescriptionPolaris Inc. designs, engineers, manufactures, and markets power sports vehicles worldwide. It operates through three segments: Off-Road, On-Road and Marine. The company offers off-road vehicles (ORVs), including all-terrain vehicles and side-by-side vehicles; snowmobiles and snow bikes conversion kit systems; motorcycles; and low emission, light duty hauling, passenger, and industrial vehicles. It also provides quadricycles and moto-roadsters; ORV accessories comprising winches, bumper, plows, racks, wheels and tires, pull-behinds, cab systems, lighting and audio systems, cargo box accessories, tracks, and oil; snowmobile accessories, which include covers, traction products, electric starters, reverse kits, tracks, bags, windshields, oil, and lubricants; and motorcycle accessories, such as saddle bags, handlebars, backrests, exhausts, windshields, seats, oil, and various chrome accessories. In addition, the company offers gear and apparel, such as helmets, jackets, gloves, pants, hats, goggles, boots, bibs, and leathers; and pontoon and deck boats. The company provides its products through dealers and distributors, and online; and aftermarket parts, garments, and accessories through 101 brick-and-mortar retail centers, call centers, and e-commerce sites. The company was formerly known as Polaris Industries Inc. Polaris Inc. was founded in 1954 and is headquartered in Medina, Minnesota.
How the Company Makes MoneyPolaris generates revenue primarily through the sale of its vehicles, including ATVs, SxS, and snowmobiles, which account for a significant portion of its earnings. The company also earns money from the sale of aftermarket parts, accessories, and clothing related to their vehicles. Additionally, Polaris has established strategic partnerships with various dealers and distributors, enhancing its market reach and sales capabilities. The company benefits from seasonal demand fluctuations, particularly in winter for snowmobiles and in warmer months for ATVs and SxS vehicles. Polaris also invests in innovation and product development, allowing it to capture new market opportunities and expand its customer base.
Polaris Earnings Call Summary
Earnings Call Date:Jan 27, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 28, 2026
Earnings Call Sentiment Positive
The call balanced meaningful operational and product progress—share gains, strong aftermarket growth, manufacturing cost reductions, quality improvements, inventory normalization, $741M operating cash generation and substantial debt paydown—against pervasive near-term macro and policy headwinds. Tariffs, promotional pressure, segment softness in on-road and marine, a low full-year free cash flow figure, and a negative Q1 EPS outlook are material near-term challenges. Management provided constructive 2026 guidance (sales growth ex-Indian, EBITDA margin expansion and EPS targets) and detailed mitigation plans (China spend reduction, lean improvements), suggesting improving underlying business fundamentals despite the current tariff-driven drag.Q4-2025 Updates
Positive Updates
Quarterly and Retail Growth
Q4 sales increased 9%; North American retail rose 9% (excluding youth). Off-road vehicle (ORV) sales were up 11% in the quarter and international sales grew 9%.
Aftermarket and PG&A Strength
Global PG&A (parts, garments & accessories) sales increased 20%, supported by strength in factory-installed accessories and oil; ridership and service metrics (miles per unit, dealer repair orders) are trending positively.
Product Success and Market Share Gains
Polaris achieved share gains across all segments (ORV, snowmobiles, pontoons, motorcycles). Notable product wins: Ranger 500 was the highest-retailing midsize side-by-side (~60% more volume than the nearest competitor), RZR Pro R and Polaris Expedition strong, Bennington QX refreshed and Godfrey Sandpans earned Pontoon of the Year; factory racing captured a third consecutive Dakar podium.
Operational Improvements and Cost Savings
Manufacturing transformation delivered more than $60 million in savings in 2025; over $240 million of structural plant cost reductions removed over the last two years; expected >$30 million of absorption benefit in 2026; warranty expense reduced by $25 million year-over-year.
Inventory and Dealer Health
Dealer inventory is near historically healthy levels with just under ~100 days on hand (lowest outside pandemic); ORV dealer inventory down 9% excluding youth and snow dealer inventory down >40%; inventory aged >180 days reduced ~60%.
Cash Generation and Balance Sheet Actions
Generated approximately $741 million of operating cash for the year and paid down roughly $530 million of debt in 2025; Q4 operating cash ~ $180 million and Q4 free cash flow ~ $120 million; company remains committed to dividend (30 consecutive years of increases).
Progress on China Exposure Reduction
China-based spend on material cost of goods sold reduced from ~18% in 2024 to ~14% in 2025 with a goal to lower to <5% by year-end 2027, supporting tariff mitigation and localized supply chain resiliency.
2026 Outlook and Financial Guidance
Full-year 2026 guidance: total company sales growth of 1%–3% (or ~7%–9% organic ex-Indian Motorcycle), adjusted EBITDA margin expansion of 80–120 basis points, and adjusted EPS of $1.50–$1.60. Indian Motorcycle separation expected to be accretive (~$0.75–$0.80 benefit in 2026 given expected closing timing).
Negative Updates
Material Tariff Headwind
Tariffs represented the most significant challenge: ~$37 million of tariff cost hit adjusted gross margin in Q4; company expects approximately $90 million of incremental tariffs in 2026 (Q1 headwind ~ $45 million) and total ex-Indian tariffs for the year of roughly $215 million—creating a sizable drag on margins and EPS.
Margin Compression and Expense Normalization
Adjusted EBITDA margin contracted year-over-year in Q4 driven by tariff impact and incentive compensation normalization; Q4 also experienced higher R&D spend supporting new programs, pressuring operating expense.
Promotional Environment / Pricing Pressure
Net pricing was a modest headwind as elevated promotions continued to outpace price, which partially offset mix and volume benefits to gross profit.
Segment Weaknesses and Seasonal Uncertainty
On-road retail declined low double-digits (lapping prior-year Indian Scout launch); marine retail declined ~13% in Q4 despite pontoon outperformance; snowmobiles showed early-season strength but industry moderation (mountain/coverage variability) caused the company to run a conservative build schedule for 2026–2027.
Youth Manufacturing Transition Impact
Transitioning youth manufacturing out of China temporarily reduced youth inventory availability, which negatively impacted retail and share in the quarter.
Low Full-Year Free Cash Flow Despite Strong Operating Cash
Although operating cash generation was strong (~$741M), full-year free cash flow was only about $6.5 million due to working capital and other timing items, highlighting cash conversion variability.
Near-Term EPS Pressure in Q1
Q1 2026 adjusted EPS is expected to be approximately negative $0.45 primarily due to tariff headwinds and the timing of Indian Motorcycle inclusion for a significant portion of the quarter.
Commodity Inflation and Policy Uncertainty
Management highlighted a ~$20 million commodities headwind and ongoing regulatory/tariff policy uncertainty (including potential Mexico/China tariff actions and pending legal/regulatory outcomes) that could materially affect costs and margins.
Company Guidance
Polaris guided 2026 total-company sales up 1–3% (which equals roughly 7–9% organic growth if you exclude ~ $300M of Indian Motorcycle revenue), adjusted EBITDA margin expanding 80–120 basis points, and adjusted EPS of $1.50–$1.60 (Indian separation expected to deliver ~$0.75–$0.80 of 2026 benefit and about $1.00 annualized). Management also assumed ~ $90M of incremental tariffs in 2026 (about $45M in Q1 and roughly $215M of total tariffs ex‑Indian for the year), more than $30M of absorption benefit from operations, operating expenses down ~4% from the separation, $30–$35M of TSA other income, roughly $160M of operating cash flow / $120M of free cash flow, Q1 sales growth >10% with Q1 adjusted EPS ≈ –$0.45, and ongoing structural progress (China spend ~14% of material COGS at year‑end 2025, target <5% by YE‑2027, >$60M manufacturing savings in 2025, $240M of plant cost removal over two years, and a $25M warranty reduction).Polaris Financial Statement Overview
Summary
Overall fundamentals are mixed: income statement deterioration is significant with 2025 swinging to a net loss and negative EBITDA margin, while revenue is roughly flat. Offsetting positives include strong 2025 operating/free cash flow rebound and meaningful debt reduction, though equity declined, leaving a thinner capital cushion.Income Statement
Profitability has deteriorated sharply: 2025 turned to a net loss (-6.5% net margin) and negative EBITDA margin after solid profitability in 2022–2023 (mid-single-digit net margins and double-digit EBITDA margins). Revenue is essentially flat from 2024 to 2025 and remains below the 2022–2023 peak, signaling a weaker demand/price environment. Strengths include still-positive gross margin (~19% in 2025), but the step-down from prior years and the swing to losses meaningfully pressure the score.34
Negative
Balance Sheet
Leverage improved in 2025 as total debt fell to about $1.5B from ~$2.2B in 2024, which reduces financial risk. However, equity also declined materially (to ~$0.83B from ~$1.29B), leaving a thinner capital cushion versus recent history. With losses in 2025, returns to shareholders also weaken, so while deleveraging is a positive, the reduced equity base and earnings pressure keep the balance sheet in the mid-range.48
Neutral
Cash Flow
Cash generation is a clear bright spot: 2025 produced strong operating cash flow (~$741M) and free cash flow (~$558M), a major rebound from 2024’s very weak free cash flow (~$6.5M). That said, free cash flow declined modestly versus 2023 and is not consistently strong across the full period (including negative free cash flow in 2021), indicating some volatility. Overall, strong recent cash conversion supports a higher score despite uneven history.67
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 7.15B | 7.18B | 8.93B | 8.59B | 7.44B |
| Gross Profit | 1.32B | 1.40B | 1.91B | 1.91B | 1.70B |
| EBITDA | -114.00M | 569.40M | 1.01B | 1.07B | 881.20M |
| Net Income | -465.50M | 110.80M | 502.80M | 589.70M | 493.90M |
Balance Sheet | |||||
| Total Assets | 4.89B | 5.53B | 5.52B | 5.22B | 5.05B |
| Cash, Cash Equivalents and Short-Term Investments | 138.00M | 287.80M | 367.80M | 324.50M | 502.30M |
| Total Debt | 1.54B | 2.20B | 2.05B | 2.17B | 1.89B |
| Total Liabilities | 4.05B | 4.23B | 4.10B | 4.12B | 3.82B |
| Stockholders Equity | 828.40M | 1.29B | 1.42B | 1.10B | 1.22B |
Cash Flow | |||||
| Free Cash Flow | 558.10M | 6.50M | 513.20M | 202.00M | -4.60M |
| Operating Cash Flow | 741.00M | 268.20M | 925.80M | 508.60M | 293.70M |
| Investing Cash Flow | -139.50M | -270.90M | -462.00M | -324.60M | -303.90M |
| Financing Cash Flow | -693.00M | -59.20M | -431.30M | -363.20M | -107.60M |
Polaris Technical Analysis
Positive
69.89
Price Trends
67.65
Positive
65.05
Positive
54.86
Positive
Market Momentum
-0.38
Positive
56.17
Neutral
53.49
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PII, the sentiment is Positive. The current price of 69.89 is above the 20-day moving average (MA) of 68.79, above the 50-day MA of 67.65, and above the 200-day MA of 54.86, indicating a bullish trend. The MACD of -0.38 indicates Positive momentum. The RSI at 56.17 is Neutral, neither overbought nor oversold. The STOCH value of 53.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PII.
Polaris Risk Analysis
Polaris disclosed 27 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $1.41B | 37.25 | 2.94% | 3.42% | 1.38% | ― | |
74 Outperform | $3.73B | 21.06 | 12.89% | 3.72% | 5.74% | 39.40% | |
69 Neutral | $6.36B | 22.36 | 6.75% | 1.94% | 1.43% | 34.76% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
60 Neutral | $2.42B | 4.83 | 14.31% | 3.47% | -15.99% | -6.76% | |
58 Neutral | $5.74B | -42.08 | -7.73% | 2.27% | -4.78% | -189.89% | |
51 Neutral | $3.93B | -8.55 | -43.95% | 3.99% | -9.39% | -173.86% |
* Consumer Cyclical Sector Average
PII
Polaris
69.89
26.93
62.69%
BC
Brunswick
88.22
23.71
36.75%
LCII
LCI Industries
154.29
57.51
59.42%
HOG
Harley-Davidson
20.51
-5.47
-21.05%
THO
Thor Industries
120.34
21.69
21.99%
WGO
Winnebago Industries
49.85
6.00
13.69%
Polaris Corporate Events
Executive/Board Changes
Polaris Announces Resignation of Long-Serving Board Director
Neutral
Jan 9, 2026
On January 8, 2026, Polaris Inc. announced that long-serving director Kevin M. Farr, who has been on the board since 2013 and currently chairs the Audit Committee and sits on the Compensation Committee, will resign from the board effective January 14, 2026. The company emphasized that Farr’s departure is not due to any disagreement over operations, policies, or practices, suggesting a smooth governance transition while it loses a seasoned audit and compensation overseer whose tenure has helped shape its board oversight structure.
The most recent analyst rating on (PII) stock is a Buy with a $83.00 price target. To see the full list of analyst forecasts on Polaris stock, see the PII Stock Forecast page.
Private Placements and Financing
Polaris Issues $500 Million in Senior Notes
Positive
Nov 13, 2025
On November 13, 2025, Polaris Inc. issued $500 million in 5.600% Senior Notes due 2031, facilitated by an underwriting agreement with several financial institutions. This strategic financial move, governed by an Indenture with U.S. Bank Trust Company, aims to strengthen Polaris’s financial position and potentially enhance its market standing.
The most recent analyst rating on (PII) stock is a Hold with a $57.00 price target. To see the full list of analyst forecasts on Polaris stock, see the PII Stock Forecast page.
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.