MBUU Stock Study (10-20-25)
Posted by Mark on December 27, 2024 at 07:03 | Last modified: October 21, 2025 08:20I recently did a stock study on Malibu Boats Inc. (MBUU, $30.25). Previous studies are here, here, here, and here.
M* writes:
> Malibu Boats is a leading designer and manufacturer of power
> boats in the United States. It is the market leader in
> performance sport boats, sold under its Malibu and Axis brands.
> It acquired Cobalt Boats, a leading producer of sterndrive
> boats in the U.S. in the 24-foot to 29-foot segment, and
> Pursuit Boats, which makes high-end offshore and outboard
> motorboats in 2018. In 2021, it purchased Maverick Boat Group,
> a top seller of flat fishing boats, with exposure to bay,
> dual-console, and center-console boats. Malibu has also
> expanded into boat trailers and accessories, and in 2020
> began producing its own engines (Monsoon) for its
> performance sport boats and now for Cobalt. Malibu’s target
> market includes a wide range of water enthusiasts who
> embrace the active outdoor lifestyle.
Over the past decade, the small-size company grows sales and earnings at annualized rates of 18.6% and 7.8% excluding ’24 whose negative earnings disrupts the calculation [I think overall earnings growth should still be negative since ’16 to ’25 is $1.00 to $0.76/share]. Through ’23, lines are mostly up, straight, and parallel except for a sales dip in ’20 (FY ends Jun 30) and EPS dips in ’18, ’20, and ’23. With 2024-5, however, visual analysis looks broken. 5- (10-) year EPS R^2 is 0.77 (0.01) [excluding ’24, these become 0.76 (0.07); with a negative number in ’24, I can’t explain why the 5-year only dips by 0.01] and Value Line (VL) gives an Earnings Predictability score of 35.
Over the past decade, PTPM leads peer and industry averages until ’24 despite falling from 12.7% (’16) to 2.5% (’25) with a last-5-year mean of 7.8%. ROE falls from 72.6% (’17) to 2.9% (’25) with a last-5-year mean of 15.1%. Debt-to-Capital is lower than peer and industry averages while falling from 84.0% (’16) to 3.8% (’25) with a last-5-year mean of 10.4%.
Quick Ratio is only 0.52 with Interest Coverage 11.8 per M* who assigns a “Narrow” Economic Moat, gives a “Standard” rating for Capital Allocation, and gives a C grade for Financial Health (via BI website). VL rates the company B for Financial Strength.
With regard to sales growth:
- YF projects YOY 2.7% contraction and 8.6% growth for ’26 and ’27, respectively (based on 8 analysts).
- Zacks projects YOY 0.1% contraction and 7.0% growth per year for ’26 and ’27, respectively (3 analysts).
- VL projects 2.7% annualized growth from ’25-’29.
- CFRA gives ACE 2.7% YOY contraction and 2.8% per year growth for ’26 and ’25-’27 (8).
- M* gives a 2-year ACE of 1.9% annualized growth and 6.5% per year from ’26-’35 (analyst note).
My 1.0% forecast is near bottom of the range.
With regard to earnings growth:
- MarketWatch projects 12.1% YOY and 18.4% per year for ’26 and ’25-’27, respectively (based on 10 analysts).
- Nasdaq.com gives ACE of 63.3% YOY for ’27 (2 analysts).
- YF projects YOY 1.6% and 1.5% for ’26 and ’27, respectively (8).
- Zacks projects YOY 22.8% contraction and 50.8% growth for ’26 and ’27 (2), respectively.
- VL projects 22.0% annualized growth from ’25-’29.
- CFRA gives ACE growth 93.4% YOY and 76.6% per year for ’26 and ’25-’27 (8).
- M* projects long-term annualized growth of 55.5%.
My 20.0% forecast is below the long-term-estimate range [mean of only two: 38.8%; negative annual earnings often disrupts long-term forecasts from Zacks, Seeking Alpha, LSEG, and apparently Finviz for the next year(s)]. My initial value is ’25 EPS of $0.76/share: an 85% EPS decline from ’23.
My Forecast High P/E is 17.0. Over the last 10 years, high P/E decreases from 21.5 (’16) to 14.0 (’23) with a last 5-year mean of 14.4 (NMF and 62.9 excluded from ’24 and ’25, respectively) and last 5-year-mean average P/E of 11.3 (same years excluded from low P/E calculation). My forecast is arbitrarily high enough to avoid an INVALID study.
My Forecast Low P/E is 6.0. Over the last 10 years, low P/E decreases from 11.4 (’16) to 9.2 (’23) with a last-5-year mean of 8.1 (’24 and ’25 excluded). I am forecasting below the range.
My Low Stock Price Forecast is $21.00. Default $4.60 based on initial value given above is unreasonably low at 84.8% (81.1%) less than the previous close (52-week low). My arbitrary selection is 30.6% (13.9%) less (respectively).
These inputs land MBUU in the SELL zone with an U/D ratio of 0.2. Total Annualized Return (TAR) is 1.2%.
PAR (using Forecast Average—not High—P/E) of NEGATIVE 6.4% is unthinkable for an investment prospect. If a healthy margin of safety (MOS) anchors this study, then I can proceed based TAR instead but even that is much lower than the current risk-free rate.
To assess MOS, I would normally start with Member Sentiment but this novel situation confuses us all. Aside from mine, only three other studies have been done in the last 90 days. Two of the four use negative numbers for low EPS, which I find unreasonable. The other study uses the 55.5% EPS long-term growth estimate to get a forecast high stock price of $183, which I find unreasonable.
I find my study unreasonable with its Forecast High P/E greater than three of the past five years (including an NMF but not including ’25, which is mathematically exaggerated due to small base).
I have little confidence with what multiple the market will assign the stock going forward or how/if its earnings recovery will proceed since the ’24-’25 debacle is a novel event. In my opinion, this is precisely why we seek up, straight, and parallel visual analysis thereby representing consistent historical behavior.
Per U/D, MBUU is a BUY under $23.80/share. BI TAR criterion is met under $16.00/share given a forecast high price ~ $32. Possibly even better to avoid for the next five years altogether. I may periodically revisit just to check this supposition.
A 90-day free trial to BetterInvesting® may be secured here (also see link under “Pages” section at top right of this page).
Full disclosure: I currently own MBUU shares.
Categories: BetterInvesting® | Comments (0) | Permalink