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TheStreet Open House
Harley-Davidson Inc
HOG : NYSE : Consumer Goods
$58.00 -0.20 | -0.34%
Today's Range: 57.86 - 58.32
Avg. Daily Volume: 1,702,600
10/01/14 - 10:36 AM ET

Financial Analysis


HARLEY-DAVIDSON INC's gross profit margin for the second quarter of its fiscal year 2014 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. HARLEY-DAVIDSON INC has strong liquidity. Currently, the Quick Ratio is 1.54 which shows the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 19.31% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q2 FY14 Q2 FY13
Net Sales ($mil)2000.71794.31
EBITDA ($mil)632.16512.59
EBIT ($mil)588.44472.03
Net Income ($mil)354.15271.74


Balance Sheet Q2 FY14 Q2 FY13
Cash & Equiv. ($mil)1211.841646.33
Total Assets ($mil)10076.39707.2
Total Debt ($mil)5358.935536.37
Equity ($mil)3366.262821.24


Profitability Q2 FY14 Q2 FY13
Gross Profit Margin46.744.88
EBITDA Margin31.5928.56
Operating Margin29.4126.31
Sales Turnover0.620.6
Return on Assets8.517.21
Return on Equity25.4924.82
Debt Q2 FY14 Q2 FY13
Current Ratio1.782.12
Debt/Capital0.610.66
Interest Expense39.9951.8
Interest Coverage14.719.11


Share Data Q2 FY14 Q2 FY13
Shares outstanding (mil)217.46223.07
Div / share0.280.21
EPS1.621.21
Book value / share15.4812.65
Institutional Own % n/a n/a
Avg Daily Volume1701740.01424657.0

Valuation


BUY. This stock's P/E ratio indicates a premium compared to an average of 12.94 for the Automobiles industry and a discount compared to the S&P 500 average of 19.49. For additional comparison, its price-to-book ratio of 3.94 indicates a premium versus the S&P 500 average of 2.70 and a premium versus the industry average of 3.69. The price-to-sales ratio is above the S&P 500 average and well above the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, HARLEY-DAVIDSON INC proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
HOG 15.64 Peers 12.94   HOG 11.46 Peers 14.56

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

HOG is trading at a premium to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

HOG is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
HOG 13.97 Peers 25.47   HOG 1.02 Peers 1.83

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

HOG is trading at a significant discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

HOG trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
HOG 3.94 Peers 3.69   HOG 25.80 Peers 27.42

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

HOG is trading at a valuation on par with its peers.

 

Average. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

HOG is expected to keep pace with its peers on the basis of earnings growth.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
HOG 2.12 Peers 1.53   HOG 8.19 Peers 13.53

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

HOG is trading at a significant premium to its industry.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

HOG significantly trails its peers on the basis of sales growth

 

 

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