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).