Q3 Earnings Preview for Polaris (NYSE:PII)

in EARNINGS/INVESTING IDEAS by

Polaris Inc. (NYSE:PII) is scheduled to report Q3 earnings results on October 27, 2020.

The company is expected to report earnings of $2.19/share on revenue of $1.934 billion. The consensus earnings per share (EPS) of $2.19/share is based on a poll of 15 analysts and represents a growth in eps of 30.4% over the same quarter last year, when the company reported earnings of $1.68/share.

The revenue forecast of $1.934 billion based on a poll of 13 analysts implies a year-over-year (YoY) growth in revenue of 9.2%. Last year the company reported $1.772 billion in revenue for the quarter.

Expected to report EPS growth of 30.4% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $1,933.87 $1,771.65 9.2%
EPS $2.19 $1.68 30.4%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarters.

What are your expectations from Polaris Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.63 $1.30 107.5% Beat
Q1, 2020 $0.50 $0.22 −56.3% Missed
Q4, 2019 $1.79 $1.83 2.3% Beat
Q3, 2019 $1.57 $1.68 7.3% Beat
Q2, 2019 $1.65 $1.73 5.1% Beat
Q1, 2019 $0.91 $1.08 18.9% Beat
Q4, 2018 $1.82 $1.83 0.6% Beat
Q3, 2018 $1.56 $1.86 19.1% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 8.5%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 28, 2020 $97.97 $106.28 8.5% Increase
April 28, 2020 $67.51 $75.07 11.2% Increase
January 28, 2020 $90.98 $94.54 3.9% Increase
October 22, 2019 $91.40 $101.67 11.2% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.63, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.63 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

Polaris Inc. is currently trading at $95.50/share, up 1.1% for the day. The company is trading at approximately 86.6% of its 52-week high of $110.30/share. The company’s stock price is down −10.1% since the last earnings report and up 0.4% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 45.50 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:PII Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −109.62 and a forward P/E multiple of 14.31.

Polaris Inc.’s current share price also implies a price-to-book (P/B) multiple of 7.78. The following table summarizes some other key fundamental ratios:

Data as of October 21, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $95.50
P/E Ratio −109.6x
P/E Ratio (Fwd) 14.3x
PEG Ratio 0.9
Total Debt / Total Capital 26.2%
Levered Free Cash Flow $559.6 million
EV / EBITDA 12.2x

Finbox

Polaris Inc. is a mid-cap stock with a market capitalization of $5.858 billion and a total enterprise value of $7.371 billion. The company operates in the Consumer Discretionary sector and the Leisure Products industry.

Polaris Inc. designs, engineers, manufactures, and markets power sports vehicles worldwide. It operates in five segments: ORV/Snowmobiles, Motorcycles, Global Adjacent Markets, Aftermarket, and Boats. The company offers off-road vehicles (ORVs), including all-terrain vehicles and side-by-side vehicles; snowmobiles and snow bikes conversion kit systems; motorcycles; and low emission, light duty hauling, passenger, and industrial vehicles. It also produces replacement parts and accessories comprising winches, bumper/brushguards, plows, racks, wheels and tires, pull-behinds, cab systems, lighting and audio systems, cargo box accessories, tracks, and oil for ORVs; snowmobile accessories, which comprise covers, traction products, reverse kits, electric starters, tracks, bags, windshields, oil, and lubricants; and motorcycle accessories, including e saddle bags, handlebars, backrests, exhausts, windshields, seats, oil, and various chrome accessories. In addition, the company offers gear and apparel, such as helmets, jackets, gloves, pants, hats, goggles, boots, bibs, and leathers; off-road Jeep and truck accessories; and pontoon, deck, cruiser, and fishing boats. The company markets its products under the RZR, RANGER, GENERAL, SPORTSMAN, INDIAN MOTORCYCLE, SLINGSHOT, Timbersled, GEM, Goupil, Aixam and Taylor-Dunn, DAGOR, Sportsman MV, MRZR, Pro Comp, Smittybilt, Rubicon Express, Poison Spyder, Trail Master, LRG, G2 Axle & Gear, Kolpin, Pro Armor, Klim, 509, Trail Tech, Bennington, Godfrey, Hurricane, Rinker, Larson, and Striper brands. It provides its products through dealers and distributors, and online; and aftermarket parts and accessories through 95 brick-and-mortar retail centers, call centers, and e-commerce sites. The company was formerly known as Polaris Industries Inc. Polaris Inc. was founded in 1954 and is headquartered in Medina, Minnesota.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.