Polaris (PII) AI Stock Analysis

• Market Cap: $2.32B
• Dividend Yield: 6.48%
• Average Volume (3M): 1.40M
• Price to Earnings (P/E): 58.1
• Beta (1Y): 1.06
• Revenue Growth: -17.86%
• EPS Growth: -89.55%
• Country: US
• Employees: 15,000
• Sector: Consumer Cyclical
• Sector Strength: 58
• Industry: Auto - Recreational Vehicles
• EPS (TTM): -0.90
• Shares Outstanding: 56,197,770
• 10 Day Avg. Volume: 1,252,455
• 30 Day Avg. Volume: 1,402,537
• PEG Ratio: 0.38
• Price to Book (P/B): 5.45
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 29.65
• Enterprise Value/Market Cap: 3.37
• Enterprise Value/Revenue: 0.26
• Enterprise Value/Gross Profit: 5.75
• Enterprise Value/Ebitda: 3.08
• 1Y Price Target: $32.25
• Price Target Upside: -21.97% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

• Rating: 62 Neutral
• Price Target: $43.00 ▲(4.04%Upside)

The overall stock score for Polaris is influenced significantly by financial performance and technical analysis. The company shows resilience with strong cash flow but faces challenges with declining profitability and revenue inconsistency. Technical indicators suggest mixed short-term momentum. Valuation concerns arise from a high P/E ratio, but a strong dividend yield offers some appeal. The earnings call underscores operational strengths but highlights significant market challenges and uncertainties.

Positive Factors

Innovation

PII highlighted new innovation that it expects to help grow its market share including an entry level priced ORV launch later this year.

Market Share

Polaris gained market share in mid-size motorcycles with the new Indian Scout Lineup.

Negative Factors

Gross Margin

The company experienced a decrease in gross margin due to higher promotional activity and unfavorable foreign exchange conditions.

Sales Decline

Polaris reported a decline in off-road, on-road, and marine sales due to lower volume and higher promotional activity.

Tariff Uncertainty

Tariff uncertainty represents an unknowable but sizeable risk factor moving forward, making it hard to recommend these shares.

Polaris Business Overview & Revenue Model

Company Description

Polaris 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 Money

Polaris Inc. generates revenue through the sale of its extensive lineup of powersports vehicles, including all-terrain vehicles (ATVs), snowmobiles, side-by-side vehicles, and motorcycles. Additionally, the company earns income from its aftermarket segment, which offers parts, garments, and accessories to enhance and maintain its products. Polaris also benefits from its boat segment, which includes brands like Bennington, Godfrey, and Hurricane. The company leverages a network of independent dealers and distributors worldwide to reach its customers. Strategic partnerships and a focus on innovation in product development further bolster Polaris's revenue streams, ensuring a competitive edge in the powersports industry.

Polaris Financial Statement Overview

Summary

Polaris faces challenges with declining profitability and inconsistent revenue, impacting its income statement. The balance sheet indicates stable equity but increased leverage, raising concerns. Strong operating cash flow is a positive aspect, although free cash flow remains inconsistent. Overall, the company demonstrates resilience but faces profitability and growth challenges.

Income Statement

Polaris has shown fluctuating revenues, with a notable decline in both EBIT and net income over the TTM period. The gross profit margin is healthy, yet the net profit margin is low due to decreased net income. Revenue growth has been inconsistent, indicating potential market challenges.

Balance Sheet

The company's debt-to-equity ratio has increased slightly, indicating higher leverage, which could pose risks. However, the equity ratio remains stable, reflecting a decent balance between the company's assets and liabilities. Return on equity is low, impacted by declining net income.

Cash Flow

Operating cash flow is strong, showing improvement over previous periods. However, free cash flow growth is volatile, with a significant drop in the TTM period. The operating cash flow to net income ratio is high, suggesting strong cash conversion.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
6.97B	7.18B	8.93B	8.59B	8.20B	7.03B
	Gross Profit
1.36B	1.47B	1.96B	1.96B	1.94B	1.71B
	EBIT
194.60M	290.60M	700.90M	804.50M	709.00M	587.30M
	EBITDA
501.00M	290.60M	1.01B	1.07B	881.20M	462.70M
	Net Income Common Stockholders
40.20M	110.80M	502.80M	603.40M	493.90M	124.80M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
291.70M	287.80M	367.80M	324.50M	509.20M	634.70M
	Total Assets
5.45B	5.53B	5.52B	5.22B	5.05B	4.63B
	Total Debt
2.18B	2.20B	2.05B	2.17B	1.97B	1.58B
	Net Debt
1.89B	1.91B	1.69B	1.84B	1.46B	943.00M
	Total Liabilities
4.22B	4.23B	4.10B	4.12B	3.82B	3.49B
	Stockholders Equity
1.23B	1.29B	1.42B	1.10B	1.22B	1.14B
Cash Flow		Free Cash Flow
168.90M	6.50M	513.20M	202.00M	-4.60M	804.70M
	Operating Cash Flow
456.80M	268.20M	925.80M	508.60M	293.70M	1.02B
	Investing Cash Flow
-242.50M	-270.90M	-462.00M	-324.60M	-303.90M	-150.70M
	Financing Cash Flow
-231.80M	-59.20M	-431.30M	-363.20M	-107.60M	-415.40M

Polaris Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 41.33
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 41.33 is above the 20-day moving average (MA) of 39.99, above the 50-day MA of 36.62, and below the 200-day MA of 54.15, indicating a neutral trend. The MACD of 1.26 indicates Negative momentum. The RSI at 58.86 is Neutral, neither overbought nor oversold. The STOCH value of 52.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PII.

Polaris Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LCII	76 Outperform	$2.28B	14.81	11.44%	5.22%	1.04%	65.90%
THO	73 Outperform	$4.70B	21.18	5.42%	2.27%	-6.41%	-15.85%
HOG	68 Neutral	$2.96B	9.10	10.84%	2.98%	-17.15%	-40.76%
BC	67 Neutral	$3.75B	47.04	5.16%	3.09%	-15.42%	-77.50%
Sector *	62 Neutral	$6.88B	11.07	2.77%	4.28%	2.67%	-24.94%
PII	62 Neutral	$2.32B	58.14	3.09%	6.48%	-17.86%	-89.55%
WGO	62 Neutral	$897.65M	―	-0.45%	4.31%	-12.29%	-105.55%

Polaris Corporate Events

Polaris Announces Leadership Changes with Eastman’s Retirement

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.