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Malibu Boats Inc Class A MBUU

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Morningstar’s Analysis

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Strong EBITDA Performance Headlines Malibu’s Second-Quarter Financial Results; Shares Undervalued

Jaime M. Katz, CFA Senior Equity Analyst

Analyst Note

| Jaime M. Katz, CFA |

We plan to increase our $87 per share fair value estimate by a mid-single-digit for narrow-moat Malibu after incorporating robust second-quarter results that included 9% sales growth to $196 million and a 12.5% increase in average selling prices (ahead of our 9% forecast). The gross margin handily outperformed our 23% outlook, rising 320 basis points to 25.3%, helped by higher throughput and mix, which supported an adjusted EBITDA margin of 20%, also well above our 16% expectation. In turn, Malibu raised its full-year outlook to include sales growth of more than 35% (including the Maverick acquisition, in line with our forecast) and adjusted EBITDA margins of  20.5%. This is ahead of our 18% estimate, which we intend to edge up, given that the first half of the fiscal year has already delivered 20% adjusted EBITDA margin metrics and the back half of the year is lapping fairly easy volume comps (a 30% decline in the second half of fiscal 2020 that led to 17% adjusted EBITDA metrics).

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Company Profile

Business Description

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 2017, and Pursuit Boats, which makes high-end offshore and outboard motorboats in 2018. In 2021, it purchased Maverick Boat Group, a leading 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 for its performance sport boats. Malibu’s target market includes a wide range of water enthusiasts who embrace active lifestyles.

5075 Kimberly Way
Loudon, TN, 37774
T +1 865 458-5478
Sector Consumer Cyclical
Industry Recreational Vehicles
Most Recent Earnings Dec 31, 2020
Fiscal Year End Jun 30, 2021
Stock Type Cyclical
Employees 1,795