These Analysts Think Fox Factory Holding Corp.'s (NASDAQ:FOXF) Sales Are Under Threat

The latest analyst coverage could presage a bad day for Fox Factory Holding Corp. (NASDAQ:FOXF), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After this downgrade, Fox Factory Holding's eight analysts are now forecasting revenues of US$1.4b in 2025. This would be a modest 3.2% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$1.6b in 2025. The consensus view seems to have become more pessimistic on Fox Factory Holding, noting the substantial drop in revenue estimates in this update.

Check out our latest analysis for Fox Factory Holding

Notably, the analysts have cut their price target 19% to US$40.13, suggesting concerns around Fox Factory Holding's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Fox Factory Holding's revenue growth is expected to slow, with the forecast 2.6% annualised growth rate until the end of 2025 being well below the historical 15% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.3% per year. Factoring in the forecast slowdown in growth, it seems obvious that Fox Factory Holding is also expected to grow slower than other industry participants.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Fox Factory Holding next year. They also expect company revenue to perform worse than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Fox Factory Holding after today.

There might be good reason for analyst bearishness towards Fox Factory Holding, like its declining profit margins. Learn more, and discover the 2 other flags we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.