Breaking Down Harley-Davidson, Inc. (HOG) Financial Health: Key Insights for Investors

Are you keeping a close eye on Harley-Davidson, Inc. (HOG), and wondering about its financial stability? With 2024 presenting a mixed bag of results, it's crucial to understand the key factors influencing its financial health. While the launch of new Street Glide and Road Glide touring motorcycles helped drive Harley-Davidson's market share to 74.5% in the U.S. Touring segment, the company faced significant headwinds, including a 17% decrease in global motorcycle shipments.

Harley-Davidson, Inc. (HOG) Revenue Analysis

Analyzing Harley-Davidson, Inc. (HOG)'s financial performance requires a detailed look at its revenue streams, growth rates, and segment contributions. Recent data reveals both challenges and areas of strength for the iconic motorcycle manufacturer. For more insights, you might find this resource helpful: Mission Statement, Vision, & Core Values of Harley-Davidson, Inc. (HOG).

Breakdown of Primary Revenue Sources:

Harley-Davidson's revenue is primarily derived from two main segments:

• Motorcycles and Related Products (HDMC): This segment includes revenue from the sale of motorcycles, parts, accessories, and apparel. In 2024, HDMC was the major revenue driver, contributing $4.12 billion, which is 79% of the total revenue.
• Financial Services (HDFS): This segment includes revenue from financing and servicing wholesale inventory receivables and retail consumer loans, primarily for Harley-Davidson motorcycle purchases. In 2024, HDFS contributed $1.0 billion to the total revenue.

Year-over-Year Revenue Growth Rate:

Harley-Davidson has faced some challenges in revenue growth recently. The annual revenue for 2024 was $5.19 billion, reflecting an 11.13% decrease compared to the previous year. This decline is part of a fluctuating trend over the past few years:

• 2020: Revenue growth decreased by -24.4%.
• 2021: Revenue growth increased significantly by 31.6%.
• 2022: Revenue growth decreased to 7.8%.
• 2023: Revenue growth further declined to 1.4%.

The average revenue growth from fiscal years ending December 2020 to 2024 was approximately 1.1%.

Contribution of Different Business Segments to Overall Revenue:

The Harley-Davidson Motor Company (HDMC) segment remains the primary revenue generator. However, there have been shifts in the contributions of different segments:

• In 2024, HDMC contributed $4.12 billion.
• The Financial Services (HDFS) segment has shown growth, with revenue increasing to $1.0 billion in 2024.

Analysis of Significant Changes in Revenue Streams:

Several factors have influenced Harley-Davidson's revenue streams:

• Decline in Motorcycle Shipments: Global motorcycle shipments by HDMC decreased by 17% in 2024 compared to the previous year.
• Retail Sales Performance: Worldwide retail sales of Harley-Davidson motorcycles decreased by 7.1% in 2024 compared to 2023.
• Regional Variances:
  • North America: Retail sales of Touring, Trike, and CVO models increased by over 8%.
  • EMEA: Retail sales declined by 11% overall, but Touring, Trike, and CVO sales increased by 10%.
  • APAC: Retail sales declined by 18%, driven by weakness in Japan and China.
• Impact of New Models: The launch of new Street Glide and Road Glide touring motorcycles contributed to nearly 5% growth in the U.S. Touring segment, increasing market share to 74.5% in 2024.
• LiveWire Performance: LiveWire, the electric motorcycle segment, experienced a 32% decrease in revenue in the fourth quarter of 2024.

Here is a summary of Harley-Davidson's financial performance in 2024:

Despite facing economic headwinds and a decrease in overall revenue, Harley-Davidson has shown resilience in specific segments and regions. The company's focus on touring models and financial services has provided some stability, while challenges in global sales and the electric motorcycle market need to be addressed.

Harley-Davidson, Inc. (HOG) Profitability Metrics

Here's a detailed look into Harley-Davidson, Inc.'s profitability, providing key insights for investors. You can also explore Breaking Down Harley-Davidson, Inc. (HOG) Financial Health: Key Insights for Investors for more information.

Gross Profit: In 2024, Harley-Davidson Inc.'s Gross Profit amounted to $1.4 billion.

Gross Profit Margin: Harley-Davidson's gross profit margin for the latest twelve months is 26.6%. Historically, from 2020 to 2024, the gross profit margin averaged 30.7%, peaking at 35.1% in December 2021 and hitting a low of 26.6% in December 2024. The gross margin was lower by 4.3 points in 2024 compared to 2023. This decrease was attributed to lower volumes and unfavorable net pricing, though partially offset by lower logistics and raw material costs.

Operating Income: For the full year 2024, Harley-Davidson Motor Company (HDMC) reported an operating income of $278 million. However, for the fiscal quarter ending in December 2024, the operating profit was reported as -$193.349 million.

Operating Margin: HDMC's operating margin for 2024 was 6.7%, which is 6.9 points lower compared to 2023. For the full year 2024, the consolidated operating income was $417 million, a significant decrease from the $779 million in 2023.

Net Income: Harley-Davidson reported a net income of -$116.892 million for the fiscal quarter ending December 2024. For the full year 2024, the net income was $455.4 million, a 36% decrease from FY 2023.

Net Profit Margin: The profit margin for 2024 was 8.8%, down from 12% in FY 2023, with the decrease primarily driven by lower revenue.

Earnings Per Share (EPS): Diluted EPS for 2024 was $3.44. This compares to $4.97 in 2023.

Here's an overview of Harley-Davidson, Inc.'s financial performance:

• Revenue: $5.19 billion (down 11% from FY 2023)
• Net Income: $455.4 million (down 36% from FY 2023)
• Profit Margin: 8.8% (down from 12% in FY 2023)
• EPS: $3.46 (down from $4.96 in FY 2023)

A summary of Harley-Davidson's profitability metrics:

In Q4 2024, Harley-Davidson faced several challenges, including a 35% drop in total revenues to $688 billion and a net loss of $117 million, or $0.93 per share.

Despite these challenges, Harley-Davidson increased its operating cash flow by 39% to $1.1 billion, demonstrating effective cash management strategies. The company also maintained a strong market share in the U.S. Touring segment.

For the full year 2025, Harley-Davidson anticipates:

• HDMC: Revenue flat to down 5% and operating income margin of 7.0% to 8.0%
• HDFS: Operating income down 10% to 15%
• LiveWire: Electric motorcycle unit sales of 1,000 – 1,500 and an operating loss of $70 to $80 million

These metrics provide a comprehensive overview of Harley-Davidson's financial health, enabling investors to make informed decisions.

Harley-Davidson, Inc. (HOG) Debt vs. Equity Structure

Understanding how Harley-Davidson, Inc. (HOG) finances its operations and growth is crucial for investors. This involves examining the company's debt levels, debt-to-equity ratio, and recent financing activities to assess its financial leverage and risk.

As of the fiscal year 2024, Harley-Davidson's debt profile includes both long-term and short-term obligations. While specific figures for 2024 are not available, analyzing previous years' data provides insight. For example, as of December 31, 2023, the company's total long-term debt was approximately $5.2 billion. It's essential to monitor these figures in the 2024 filings to understand any significant changes in their debt structure. Keep an eye on the upcoming financial releases for the most up-to-date information.

The debt-to-equity ratio is a key metric to evaluate Harley-Davidson's financial leverage. This ratio indicates the proportion of debt and equity the company uses to finance its assets. While the exact 2024 ratio requires updated financial data, we can look at past performance. A debt-to-equity ratio above 1.0 generally indicates that a company relies more on debt than equity financing, which can increase financial risk. Investors should compare Harley-Davidson's ratio to industry averages and its historical performance to gauge whether the company's leverage is sustainable and competitive.

Recent activities such as debt issuances, credit ratings, or refinancing provide insights into Harley-Davidson's financial strategy. For instance, credit ratings from agencies like Standard & Poor's and Moody's affect the company's borrowing costs and reflect its creditworthiness. Any downgrades or upgrades in these ratings can influence investor confidence and the company's ability to raise capital. Monitoring these ratings and any related news is vital for assessing Harley-Davidson's financial health.

Harley-Davidson strategically balances debt and equity to fund its operations and growth initiatives. Here are some key considerations:

• Debt Financing: Utilizing debt allows Harley-Davidson to invest in projects without diluting equity. However, high debt levels can increase financial risk, especially if the company faces economic downturns or declining sales.
• Equity Funding: Issuing equity can strengthen the balance sheet and provide financial flexibility. However, it can also dilute existing shareholders' ownership.

The optimal balance depends on various factors, including market conditions, interest rates, and the company's strategic priorities. Actively managing this balance is crucial for maintaining financial stability and supporting long-term growth. Investors should closely monitor Harley-Davidson's financial reports and management commentary to understand their approach to debt and equity financing.

For further insights into Harley-Davidson, Inc. (HOG) financial health, you can explore: Breaking Down Harley-Davidson, Inc. (HOG) Financial Health: Key Insights for Investors

Harley-Davidson, Inc. (HOG) Liquidity and Solvency

Understanding Harley-Davidson, Inc.'s (HOG) financial health requires a close examination of its liquidity and solvency positions. Liquidity refers to the company's ability to meet its short-term obligations, while solvency assesses its ability to meet long-term obligations. Key indicators like current and quick ratios, working capital trends, and cash flow statements provide insights into these critical areas.

The current ratio, calculated by dividing current assets by current liabilities, is a primary metric for assessing liquidity. A higher current ratio generally indicates a stronger liquidity position. Similarly, the quick ratio, which excludes inventory from current assets, offers a more conservative view of a company's ability to meet its short-term liabilities with its most liquid assets. Monitoring these ratios over time helps identify trends in Harley-Davidson, Inc.'s (HOG) short-term financial health.

Working capital, defined as the difference between current assets and current liabilities, is another essential measure of liquidity. Analyzing trends in working capital can reveal whether Harley-Davidson, Inc. (HOG) is efficiently managing its short-term resources. A declining working capital balance may signal potential liquidity issues, while an increasing balance suggests improved short-term financial health.

Cash flow statements provide a comprehensive view of Harley-Davidson, Inc.'s (HOG) cash inflows and outflows, categorized into operating, investing, and financing activities. Examining the trends in these cash flows can reveal important insights:

• Operating Cash Flow: Positive and consistent operating cash flow indicates that the company is generating sufficient cash from its core business operations.
• Investing Cash Flow: This section includes cash flows related to the purchase and sale of long-term assets. Significant investments may indicate growth initiatives, while divestitures may suggest strategic adjustments.
• Financing Cash Flow: This includes cash flows related to debt, equity, and dividends. Analyzing financing cash flows can reveal how Harley-Davidson, Inc. (HOG) is managing its capital structure and returning value to shareholders.

By evaluating these key financial metrics, investors and analysts can gain a deeper understanding of Harley-Davidson, Inc.'s (HOG) liquidity and solvency, helping them make informed decisions. For more insights into the company's strategic direction, consider exploring the Mission Statement, Vision, & Core Values of Harley-Davidson, Inc. (HOG).

Harley-Davidson, Inc. (HOG) Valuation Analysis

Determining whether Harley-Davidson, Inc. (HOG) is overvalued or undervalued requires analyzing several key financial metrics and market indicators. Here's a breakdown to help investors assess the company's current valuation:

Valuation Ratios:

• Price-to-Earnings (P/E) Ratio: As of April 2025, Harley-Davidson's P/E ratio ranges from 4.49 to 6.64. The average historical P/E ratio for the last ten years is 107.05. The current P/E ratio is significantly lower than the historical average, suggesting potential undervaluation.
• Price-to-Book (P/B) Ratio: The P/B ratio as of April 2025 is approximately 0.8816. A P/B ratio below 1 may indicate that the stock is undervalued relative to the company's book value.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: Harley-Davidson's latest twelve months EV/EBITDA is 13.6x. The EV/EBITDA for fiscal years ending December 2020 to 2024 averaged 16.4x.

Stock Price Trends:

• Over the last 12 months, the stock price has fallen by approximately 40.50% to 44.73%.
• The 52-week high is $40.14, while the 52-week low is $20.45.
• As of April 17, 2025, the stock price is $22.51.

Dividend Analysis:

• Dividend Yield: Harley-Davidson's dividend yield is approximately 3.2%.
• Annual Dividend: The annual dividend is $0.72 per share.
• Payout Ratio: The payout ratio is approximately 20.03%, indicating that the company retains a significant portion of its earnings for reinvestment and growth.

Analyst Consensus:

• The consensus rating from analysts is 'Hold' to 'Moderate Buy'.
• The average price target from analysts is $32.00 to $38.88, with a high forecast of $45.00 and a low forecast of $26.00.
• This suggests a potential upside of approximately 41.87% from the current price.

Additional Valuation Indicators:

• An intrinsic value assessment suggests that Harley-Davidson is undervalued by approximately 46.70%, with an intrinsic value of $33.03 based on a Discounted Cash Flow model.
• Morningstar reports that HOG is trading at a 22% discount.

Financial Performance:

• In 2024, Harley-Davidson's revenue was $5.19 billion, a decrease of 11.13% compared to the previous year.
• Earnings were $455.36 million, a decrease of 35.56%.

Valuation Table:

Considering these factors, Harley-Davidson, Inc. (HOG) may be undervalued. The low P/E and P/B ratios, combined with a positive dividend yield and potential upside based on analyst price targets, suggest that the stock could be trading below its intrinsic value. However, investors should also consider the recent decline in stock price and financial performance when making investment decisions.

For further insights into investor behavior, explore Exploring Harley-Davidson, Inc. (HOG) Investor Profile: Who’s Buying and Why?.

Harley-Davidson, Inc. (HOG) Risk Factors

Understanding the risks facing Harley-Davidson, Inc. (HOG) is crucial for investors. These risks can be both internal and external, impacting the company's financial health and strategic direction. Key areas of concern include industry competition, regulatory changes, market conditions, and specific operational and financial challenges.

One significant risk stems from intense industry competition. Harley-Davidson faces pressure from established motorcycle manufacturers as well as emerging players in the electric vehicle market. These competitors often introduce innovative products and pricing strategies, potentially eroding Harley-Davidson's market share and profitability. To mitigate this, Harley-Davidson invests in research and development to create new models and technologies, but the success of these efforts is not guaranteed.

Regulatory changes also pose a risk. Environmental regulations, safety standards, and trade policies can significantly impact Harley-Davidson's operations and financial results. For example, stricter emissions standards may require costly modifications to motorcycle designs, while changes in tariffs can affect the cost of imported components and the competitiveness of exports. Monitoring and adapting to these regulatory shifts is an ongoing challenge.

Market conditions, including economic cycles and consumer preferences, play a vital role. Economic downturns can reduce consumer spending on discretionary items like motorcycles, while shifts in consumer tastes can impact demand for Harley-Davidson's traditional product offerings. The company's ability to anticipate and respond to these changes is essential for maintaining sales and profitability. Harley-Davidson is actively working to diversify its product line and appeal to a broader range of customers.

Harley-Davidson's annual report on Form 10-K, filed with the Securities and Exchange Commission (SEC), provides detailed information on these and other risk factors. Investors should carefully review these filings to gain a comprehensive understanding of the challenges facing the company.

Operational and strategic risks are consistently highlighted in Harley-Davidson's filings. These include:

• Supply Chain Disruptions: Disruptions can impact production schedules and increase costs.
• Product Liability Claims: The risk of product liability claims can lead to significant expenses and reputational damage.
• Labor Relations: Work stoppages or other labor disputes can disrupt operations and impact financial performance.
• Brand Reputation: Damage to the brand's reputation, whether through product recalls, safety concerns, or other issues, can negatively impact sales and customer loyalty.

Mitigation strategies often involve diversifying supply chains, enhancing product safety measures, maintaining positive labor relations, and investing in brand protection efforts.

For additional insights into Harley-Davidson's mission, vision, and core values, consider exploring: Mission Statement, Vision, & Core Values of Harley-Davidson, Inc. (HOG).

Harley-Davidson, Inc. (HOG) Growth Opportunities

For investors eyeing Harley-Davidson, Inc. (HOG), understanding its future growth prospects is crucial. Several factors could influence the company's trajectory in the coming years.

Key growth drivers for Harley-Davidson, Inc. (HOG) include:

• Product Innovations: Developing new and appealing motorcycles and related products.
• Market Expansions: Tapping into emerging markets and expanding its presence in existing ones.
• Acquisitions: Strategic acquisitions to broaden its product portfolio or market reach.

While specific future revenue growth projections and earnings estimates for Harley-Davidson, Inc. (HOG) aren't available, keeping an eye on analyst reports and company presentations is essential for the most up-to-date insights. These sources often provide detailed forecasts based on current market conditions and company strategies.

Strategic initiatives and partnerships that may drive future growth:

• Electric Vehicle (EV) Market: Harley-Davidson's foray into the EV market with models like LiveWire represents a significant growth opportunity.
• Partnerships: Collaborations with technology companies or other automotive manufacturers could accelerate innovation and market penetration.

Harley-Davidson, Inc. (HOG) possesses several competitive advantages that could position it for growth:

• Brand Recognition: A strong and iconic brand that resonates with riders globally.
• Established Dealer Network: A widespread network of dealerships providing sales, service, and support.
• Loyal Customer Base: A dedicated community of riders who are passionate about the brand.

Here's a look at some potential future performance indicators for Harley-Davidson, Inc. (HOG):

For additional insights into Harley-Davidson, Inc. (HOG)'s financial health, you can explore: Breaking Down Harley-Davidson, Inc. (HOG) Financial Health: Key Insights for Investors.