There May Be Reason For Hope In Malibu Boats' (NASDAQ:MBUU) Disappointing Earnings

Shareholders appeared unconcerned with Malibu Boats, Inc.'s (NASDAQ:MBUU) lackluster earnings report last week. We did some digging, and we believe the earnings are stronger than they seem.

View our latest analysis for Malibu Boats

The Impact Of Unusual Items On Profit

To properly understand Malibu Boats' profit results, we need to consider the US$105m expense attributed to unusual items. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. Malibu Boats took a rather significant hit from unusual items in the year to September 2023. As a result, we can surmise that the unusual items made its statutory profit significantly weaker than it would otherwise be.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On Malibu Boats' Profit Performance

As we mentioned previously, the Malibu Boats' profit was hampered by unusual items in the last year. Based on this observation, we consider it possible that Malibu Boats' statutory profit actually understates its earnings potential! And on top of that, its earnings per share have grown at 35% per year over the last three years. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example - Malibu Boats has 2 warning signs we think you should be aware of.

This note has only looked at a single factor that sheds light on the nature of Malibu Boats' profit. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying to be useful.

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.