Malibu Boats (MBUU) Stock Forecast & Price Target

Malibu Boats is experiencing strong momentum in the ski/wake boat segment, which has contributed to a positive sales outlook, with projections indicating approximately 11% sales growth by FY26 due to volume recovery and low-single-digit price growth. The company benefits from a highly variable cost structure that supports robust free cash flow, enabling it to enhance its earnings capabilities as inventory levels normalize and market volumes rebound. Additionally, Malibu's ongoing initiatives, such as reduced promotional activity and successful sales events, coupled with a favorable environment within the marine industry, further position the company for continued margin expansion and cash generation.

Malibu Boats has revised its guidance from flat-to-low single-digit growth to flat-to-low single-digit declines year-over-year, attributing this to a lack of clear upward retail trends and an industry volume decline trending closer to 10%-12%. Despite beating consensus and management expectations, the company reported a significant 26.3% drop in adjusted EBITDA to $16.9 million and a 5.1% decline in net sales to $200.3 million, alongside a 46% fall in earnings per share to $0.31. With a projected decline in sales of -1.2% for fiscal year 2025 and ongoing uncertainties in consumer spending driven by declining confidence, rising gas prices, and increasing unemployment, the financial outlook remains concerning.