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On Friday, Jefferies analyst Anna Glaessgen revised the price target for Fox Factory Holding (NASDAQ:FOXF), a company specializing in performance-defining products for bicycles and powered vehicles, to $38.00 from the previous target of $45.00. The new target aligns with InvestingPro’s Fair Value analysis, which suggests the stock is currently undervalued despite its high earnings multiple of 108x. Despite the reduction, the firm has maintained a Buy rating on the company’s stock, joining other analysts who maintain price targets ranging from $30 to $50.
The adjustment follows Fox Factory’s fourth-quarter adjusted earnings per share (EPS) report, which came in at $0.31, surpassing both the estimated $0.30 and consensus $0.29. The earnings were bolstered by the addition of Marucci sports equipment volumes and a modest recovery in the bicycle sector, which saw an approximate 8% year-over-year increase. These gains helped to mitigate ongoing cyclical challenges in the Powered Vehicle Group (PVG) and the Aftermarket Automotive Group (AAG), which saw declines of 1.8% and 7.1%, respectively. The company maintains strong financial health with a current ratio of 3.21, indicating ample liquidity to meet short-term obligations.
For the fiscal year 2025, Fox Factory provided guidance with a wide range of adjusted EPS between $1.60 and $2.60, compared to a consensus of $1.96. The higher end of the guidance is supported by $25 million in cost-saving initiatives and an anticipated recovery in Specialty Sports Group (SSG), driven by improving bicycle demand and less cyclical Marucci sports equipment volumes. InvestingPro data reveals the company’s revenue declined by 10.8% in the last twelve months, making these cost-saving initiatives crucial. Get access to 8 more exclusive InvestingPro Tips and comprehensive analysis through the Pro Research Report.
The analyst’s commentary points to a sustained cyclical downturn in PVG and AAG, with expectations set for a recovery in 2026. The company’s performance and future outlook, as reflected in the adjusted price target and maintained Buy rating, indicate a cautious yet optimistic view of Fox Factory’s potential to navigate through current market challenges and capitalize on its diverse product offerings. With a beta of 1.58, the stock has shown higher volatility than the broader market, while maintaining an Altman Z-Score of 3.57, suggesting financial stability.
In other recent news, Fox Factory Holding Corp reported its financial results for the fourth quarter of 2024, revealing earnings per share (EPS) of $0.31, which fell short of the analyst forecast of $0.46. The company’s revenue also missed expectations, coming in at $352.8 million compared to the anticipated $385.63 million. Despite a year-over-year increase in total consolidated net sales by 6.1%, Fox Factory reported a net loss of $100,000, contrasting with a net income of $4.1 million in the prior year. Analysts have noted these results as a significant miss for the company, which had generally met or exceeded forecasts in previous quarters. In response to these challenges, Fox Factory announced a $25 million cost reduction initiative and operational consolidation efforts to improve future performance. The company’s 2025 net sales guidance is set between $1.385 billion and $1.485 billion, with adjusted EPS expected to range from $1.60 to $2.60. Additionally, Fox Factory is focusing on growth in its Aftermarket Applications Group and Marucci segment, while expecting the powersports and bike segments to remain flat. These developments come amid broader market challenges, including supply chain disruptions and macroeconomic pressures that could affect consumer demand.
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