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Investing.com - Stifel reduced its price target on Fox Factory Holding (NASDAQ:FOXF) to $25.00 from $33.00 on Friday, while maintaining a Buy rating following disappointing third-quarter performance. The new target represents a 14% upside from the current price of $21.96. InvestingPro data shows Fox Factory appears undervalued compared to its Fair Value, despite the stock’s 38% decline over the past year.
The firm cited softer-than-anticipated trends in the company’s Specialty Sports Group (SSG), which represents Fox Factory’s highest-margin business segment. Stifel noted the turnaround for this division will likely take approximately one year longer than previously anticipated.
Fox Factory’s reduced outlook also reflects supply chain disruptions caused by a fire at a major aluminum supplier for automotive OEM partners. This incident is expected to negatively impact production volumes through the fourth quarter of 2025 and first quarter of 2026.
Looking ahead to fiscal year 2026, the company has shifted its priorities toward profitability and realigning free cash flow rather than focusing on growth. This strategic adjustment comes as Fox Factory navigates these operational challenges. The company maintains a strong current ratio of 2.98, indicating liquid assets exceed short-term obligations, which provides financial flexibility during this transition.
Stifel’s new $25 price target is based on a 12.4x price-to-earnings multiple applied to projected fiscal year 2027 adjusted earnings of $2 per share, reflecting the firm’s revised timeline for Fox Factory’s cyclical recovery. InvestingPro analysis reveals analysts expect the company to be profitable this year with an EPS forecast of $1.70 for FY2025. For deeper insights and additional ProTips on FOXF, check out the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Fox Factory Holding Corp. reported its third-quarter 2025 earnings, highlighting a modest increase in revenue despite facing economic challenges. The company’s net sales rose to $376.4 million, marking a 5% year-over-year growth. However, Fox Factory posted a net loss of $0.6 million, translating to a loss of $0.02 per diluted share. These financial results were influenced by softening consumer demand and elevated interest rates that have impacted the market. Despite these challenges, the revenue growth indicates some resilience in the company’s operations. Analysts have taken note of these developments, although specific upgrades or downgrades were not mentioned in the recent updates. Investors may find these figures noteworthy as they assess the company’s performance amid broader economic conditions.
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