Last Update 07 Dec 25

FOXF: Powered Vehicles Strength Will Support Future Upside Despite Guidance Reset

Analysts have reduced their average price target on Fox Factory Holding by roughly one third to the low $20s, citing weaker than expected Q3 earnings, a cut to FY25 guidance, and softening demand in the Specialty Sports Group as retailers rein in bike and Marucci inventory orders.

Analyst Commentary

Analysts see the latest results and guidance reset as a mixed signal for Fox Factory Holding, with near term execution risks offset by select pockets of resilience across the portfolio.

Bullish Takeaways

Bullish analysts highlight that the Powered Vehicles Group continues to benefit from new motorcycle suspension offerings, supporting a more stable revenue and margin base despite broader softness.
Aftermarket Accessories demand remains elevated, which is viewed as a partial offset to weakness in original equipment channels and a potential driver of higher margin mix over time.
The significant reset in price targets into the low $20s is seen by some as better aligning valuation with reduced FY25 expectations, limiting downside if execution stabilizes.
Management’s decision to cut guidance is interpreted by more constructive analysts as a clearing event that may set a more achievable bar for future quarters.

Bearish Takeaways

Bearish analysts view the one third reduction in aggregate price targets as evidence that earnings power and growth visibility have materially weakened, warranting only Neutral stances for now.
The underperformance in Q3 EPS, combined with the FY25 guidance cut, raises concerns about operational execution and the pace at which demand can normalize in key end markets.
Softness in the Specialty Sports Group, particularly in Bike and Marucci, is seen as structurally challenging as retailers continue to tightly manage inventory, limiting near term volume recovery.
The lack of rating upgrades alongside the target cuts signals that many expect a prolonged period of muted growth and constrained multiple expansion until clearer signs of re acceleration emerge.

What's in the News

Lowered full year 2025 sales outlook to a range of $1.445 billion to $1.475 billion, trimming the prior $1.45 billion to $1.51 billion forecast, signaling a more cautious demand view (Corporate Guidance: Lowered).
Revised fourth quarter 2025 net sales guidance to $340 million to $370 million, targeting the bottom half of the prior implied range given softer market conditions (Corporate Guidance: New/Confirmed).
Introduced Live Valve as an aftermarket semi active suspension upgrade for trucks and Jeeps, a sensor rich system that continuously adjusts damping based on terrain and driver inputs, with broader availability expected from early 2026 (Product-Related Announcements).

Valuation Changes

Fair Value Estimate is essentially unchanged at approximately $22.86 per share, suggesting limited impact from the latest guidance reset on intrinsic value modeling.
The Discount Rate decreased modestly from about 11.85 percent to 11.16 percent, reflecting a slightly lower perceived risk profile or adjusted cost of capital assumptions.
Revenue Growth is effectively flat at around 3.50 percent, signaling no material change in long term top line growth expectations.
Net Profit Margin remains stable at roughly 4.67 percent, indicating unchanged assumptions around profitability and operating leverage over the forecast horizon.
The Future P/E edged down slightly from about 17.77x to 17.44x, implying a marginally lower valuation multiple applied to forward earnings.

Investment in premium product innovation and new market segments positions the company for sustained demand, margin growth, and competitive pricing power.
Strategic international expansion, OEM partnerships, and structural cost improvements create new growth drivers and set the stage for long-term earnings acceleration.
Exposure to tariffs, consumer cyclical markets, concentrated manufacturing, and rising operating costs poses risks to margins, earnings, and long-term competitive positioning.

Catalysts

About Fox Factory Holding

Designs, engineers, manufactures, and markets performance-defining products and system worldwide.What are the underlying business or industry changes driving this perspective?

Fox Factory's focus on new product launches-especially in premium categories, e-bikes, and entry-premium bike segments-positions the company to benefit from rising consumer preference for high-performance and technologically advanced products, supporting future revenue growth and margin improvement.
Expansion into new performance categories (such as EVs, hybrid vehicles, and motorcycles), increased OEM partnerships, and diversification into international markets (e.g., Japan for Marucci) expand Fox Factory's addressable market and establish new long-term growth vectors, translating into higher future sales and earnings.
Ongoing footprint consolidation, supply chain optimization, and vertical integration (including in-sourcing and relocation of manufacturing) are driving structural cost reductions and improved operating leverage, which, once tariff headwinds subside, are likely to expand net margins.
The company's investments in product innovation and leveraging technology (e.g., connected suspension, data-driven product enhancements) align with global trends like electrification and the adoption of alternative transportation (e-bikes, electric off-road vehicles), fueling sustainable demand and premium pricing, thus positively impacting revenue and gross margin.
Market share gains in core and adjacent categories such as aftermarket wheels, lift kits, and softball equipment-combined with a "halo effect" from strong branding and high-profile partnerships (e.g., MLB)-set up long-term revenue acceleration and increased brand-driven pricing power, supporting future top-line and bottom-line growth.

Fox Factory Holding Earnings and Revenue Growth

Fox Factory Holding Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Fox Factory Holding's revenue will grow by 6.1% annually over the next 3 years.
Analysts are not forecasting that Fox Factory Holding will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Fox Factory Holding's profit margin will increase from -17.5% to the average US Auto Components industry of 4.8% in 3 years.
If Fox Factory Holding's profit margin were to converge on the industry average, you could expect earnings to reach $82.3 million (and earnings per share of $1.96) by about September 2028, up from $-252.3 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 22.0x on those 2028 earnings, up from -4.8x today. This future PE is greater than the current PE for the US Auto Components industry at 17.7x.
Analysts expect the number of shares outstanding to grow by 0.28% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 9.36%, as per the Simply Wall St company report.

Fox Factory Holding Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Ongoing and escalating tariff pressures-particularly unexpected increases impacting key segments like Marucci, AAG, and PVG-have created significant cost headwinds that the company has only partially been able to offset through pricing, supply chain shifts, and manufacturing relocations. This persistent external risk is directly pressuring gross margins and dampening EPS guidance despite sales growth.
Heavy reliance on consumer discretionary markets (premium bicycles, powersports, aftermarket vehicle components) leaves Fox Factory vulnerable to prolonged macroeconomic weakness, high interest rates, and potential downturns in consumer spending. This cyclical exposure could result in volatile or declining revenues and net income if end market demand remains uncertain.
Increased concentration of manufacturing operations through footprint consolidation may heighten operational risk and reduce flexibility in responding to geopolitical supply chain disruptions or sudden cost escalations (e.g., tariffs, resource scarcity), which could further impact margins and timely delivery, potentially harming both earnings and free cash flow.
Ongoing investments in R&D, marketing, and expansion into new growth vectors (e.g., Marucci global/softball, new technology content in vehicles, geographic extensions) are creating near-term upward pressure on operating expenses, and these costs may outpace revenue growth if new product launches, OEM adoption, or consumer uptake do not meet expectations, thereby compressing operating margins and net earnings.
The ability to maintain and grow market share in the face of global competition-especially from lower-cost Asian manufacturers and potential industry commoditization-remains a key risk. Technological disruption or failure to keep pace with industry-standard advancements (e.g., active/adaptive suspensions, smart vehicle integrations) may erode Fox's competitive advantage, impacting both top-line revenue and profitability long-term.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $33.0 for Fox Factory Holding based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $38.0, and the most bearish reporting a price target of just $30.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.7 billion, earnings will come to $82.3 million, and it would be trading on a PE ratio of 22.0x, assuming you use a discount rate of 9.4%.
Given the current share price of $29.01, the analyst price target of $33.0 is 12.1% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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