Harley-Davidson (HOG): Revisiting Valuation After a Steep 3-Month Share Price Slide

Harley-Davidson (HOG) has been grinding through a rough stretch, with the stock sliding about 25% over the past 3 months and roughly 30% over the past year.

See our latest analysis for Harley-Davidson.

That slide is not just a bad week. It reflects a longer stretch of fading momentum, with the latest $22.35 share price sitting well below recent levels and a 1 year total shareholder return of roughly negative 30% signaling that investors are still cautious about Harley’s earnings trajectory and growth prospects.

If this kind of volatility has you wondering what else is out there in autos, it might be worth comparing Harley with other auto manufacturers that could offer a different balance of growth and risk.

With Harley shares trading below analyst targets but facing shrinking revenue and profits, the key question now is whether the recent selloff has gone too far or if the market is correctly pricing in weaker growth.

Most Popular Narrative Narrative: 19.0% Undervalued

With Harley-Davidson’s fair value in the most followed narrative sitting above the recent 22.35 dollar close, the storyline leans toward a discounted stock built on future margin strength and capital returns.

The new partnership in HDFS unlocks significant cash (1.25B dollars) and reduces leverage, enabling accelerated share buybacks and freeing up 300M dollars for growth investments, which can directly bolster EPS and future revenue streams through both financial engineering and new business initiatives.

Read the complete narrative.

Curious how shrinking revenues can still support a higher valuation, stronger margins, and more cash for investors? The full narrative reveals the math, step by step.

Result: Fair Value of $27.60 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent weak retail demand and heavy reliance on aging heavyweight riders could undermine Harley’s margin story and delay the expected recovery.

Find out about the key risks to this Harley-Davidson narrative.

Another View on Harley's Value

Our SWS DCF model paints a far less generous picture than the popular narrative, with Harley-Davidson trading slightly above its estimated fair value of 22.31 dollars. Instead of a clear bargain, the DCF suggests limited upside unless cash flows improve faster than expected.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Harley-Davidson for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 905 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Harley-Davidson Narrative

If you see Harley’s story differently or just want to dig into the numbers yourself, you can build a full narrative in minutes: Do it your way.

A great starting point for your Harley-Davidson research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.

Ready for more investing ideas?

Shift your attention beyond Harley-Davidson and consider new opportunities on Simply Wall Street’s Screener before others move first on the most compelling setups.

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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.

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