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Malibu Boats Inc Class A MBUU

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Morningstar’s Analysis

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1-Star Price

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5-Star Price

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Economic Moat

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Capital Allocation

PREMIUM

Recreational Retail Demand to Rise at a Measured Pace, Scarce Dealer Inventory Support Shipments

Jaime M. Katz, CFA Senior Equity Analyst

Analyst Note

| Jaime M. Katz, CFA |

Although unit demand in 2020 was favorable for many of the companies in the traditional recreational vehicle space, we surmise the original equipment manufacturers with meaningful market shares still have room to see further retail sales gains ahead. These market leaders have carved out new verticals for growth, which are the linchpin in our outlook for positive recreational product demand over the next five years. With the addition of boats, electric alternatives, and access to a broader demographic target market, we expect the recreational products category could grow at 3% between 2021-25, growth that we have directionally incorporated into our outlook for wide-moats Polaris and Harley-Davidson as well as narrow-moats Malibu Boats and BRP. This would represent a slowdown from retail unit growth of 3% in ATVs, 10% in side-by-sides, and 8% in personal watercraft experienced in the five years ending 2020, which closed with robust pandemic-driven takeaway (in the five years ending 2019 retail unit sales averaged negative 2%, 6%, and 8%, respectively).

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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 number-one market share position 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 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.

Contact
5075 Kimberly Way
Loudon, TN, 37774
T +1 865 458-5478
Sector Consumer Cyclical
Industry Recreational Vehicles
Most Recent Earnings Jun 30, 2021
Fiscal Year End Jun 30, 2022
Stock Type Cyclical
Employees 2,645