Polaris Inc. - NYSE:PII - Comprehensive analysis
Polaris' shares are currently trading at over a 50% discount to our fair value estimate of $75 per share. The company's strong brands, innovative products, and Lean manufacturing practices contribute to its wide economic moat. We believe Polaris will continue to leverage its research and development, high-quality standards, and operational excellence to drive demand. Historically, the company has generated exceptional returns on invested capital, including goodwill, and is projected to achieve an 18% return on invested capital (ROIC) by 2034, significantly exceeding our 10% weighted average cost of capital assumption. Recently, the stock has faced pressure due to challenges related to tariffs, which are expected to have an incremental impact of nearly $225 million in 2025, as well as slowing consumer conversion rates and cautious dealer behavior—factors we consider to be temporary. Consequently, the company has retracted its previous 2025 outlook, which anticipated a sales decline ranging from 4% to 1% and adjusted earnings per share of $1.10. The updated tariff expectations now suggest a potential EPS loss in 2025. With dealer inventory largely optimized, we expect wholesale shipments to align more closely with consumer demand. We are optimistic that long-term demand driven by new product launches will foster shipment growth and profit enhancement beyond 2025. From 2026 to 2034, we project the company will achieve an average sales growth rate of 3.6% and double-digit growth in earnings per share.
Free evaluation through quantitative algorithms Polaris Inc. - NYSE:PII
Growth-Scoring Model Detail
Total Revenue Growth Over Prior Year | -19.32 | Market 2 Sector 6 |
Gross Profit Growth Over Prior Year | -23.33 | Market 4 Sector 7 |
EBITDA Growth Over Prior Year | -39.89 | Market 3 Sector 8 |
EBITA Growth Over Prior Year | -56.51 | Market 3 Sector 7 |
EBIT Growth Over Prior Year | -58.54 | Market 2 Sector 6 |
Earnings from Cont. Ops. Growth Over Prior Year | -77.88 | Market 2 Sector 5 |
Net Income Growth Over Prior Year | -77.96 | Market 3 Sector 7 |
Normalized Net Income Growth Over Prior Year | -77.41 | Market 1 Sector 3 |
Diluted EPS before Extra Growth Over Prior Year | -77.61 | Market 2 Sector 6 |
A/R Growth Over Prior Year | -37.24 | Market 3 Sector 8 |
Inventory Growth Over Prior Year | -3.81 | Market 24 Sector 36 |
PPE Net Growth Over Prior Year | -2.34 | Market 24 Sector 39 |
Total Assets Growth Over Prior Year | 0.16 | Market 36 Sector 50 |
Tangible Book Value Growth Over Prior Year | -30.92 | Market 6 Sector 11 |
Common Equity Growth Over Prior Year | -9.06 | Market 12 Sector 29 |
Cash from Ops. Growth Over Prior Year | -71.03 | Market 2 Sector 6 |
CAPEX Growth Over Prior Year | -36.57 | Market 5 Sector 17 |
Dividend per Share Growth Over Prior Year | 1.54 | Market 40 Sector 80 |
Levered Free Cash Flow Growth Over Prior Year | -86.17 | Market 1 Sector 6 |
Unlevered Free Cash Flow Growth Over Prior Year | -72.75 | Market 2 Sector 8 |
Profitability-Scoring Model Detail
Gross Margin % | 21.5 | Market 19 Sector 23 |
SG&A Margin % | 12.88 | Market 47 Sector 30 |
EBITDA Margin % | 7.93 | Market 10 Sector 38 |
EBITA Margin % | 4.3 | Market 12 Sector 34 |
EBIT Margin % | 4 | Market 7 Sector 35 |
Earnings from Cont. Ops Margin % | 1.53 | Market 7 Sector 41 |
Net Income Margin % | 1.52 | Market 7 Sector 41 |
Net Income Avail. for Common Margin % | 1.52 | Market 7 Sector 41 |
Normalized Net Income Margin % | 1.2 | Market 4 Sector 35 |
Levered Free Cash Flow Margin % | 0.91 | Market 23 Sector 32 |
Unlevered Free Cash Flow Margin % | 2.09 | Market 23 Sector 32 |
Return on Assets % | 3.29 | Market 30 Sector 45 |
Return on Capital % | 5.21 | Market 32 Sector 51 |
Return on Equity % | 8.19 | Market 22 Sector 50 |
Return on Common Equity % | 8.18 | Market 21 Sector 51 |
Total Asset Turnover | 1.32 | Market 92 Sector 76 |
