Company Overview
Harley-Davidson, Inc. manufactures and sells motorcycles across the United States and international markets, operating through three distinct segments: Harley-Davidson Motor Company, LiveWire, and Harley-Davidson Financial Services. The company operates within the Consumer Cyclical sector and specifically within the Recreational Vehicles industry, positioning it as a producer of discretionary goods sensitive to economic cycles and consumer spending power. As of the latest data, the company holds a market capitalization of $2.30B, generates annual revenue of $4.47B, and employs a workforce of 5,500 individuals. These valuation and revenue figures indicate that while the firm maintains a significant operational footprint with over five thousand employees, its total market value reflects a niche position within the broader recreational vehicle landscape rather than a dominant industry-wide monopoly.
Financial Health
The company reported a trailing twelve-month revenue of $4.47B alongside a net income of $338.74M and an EBITDA of $620.63M, revealing a cost structure where operating expenses significantly reduce bottom-line profitability relative to earnings before interest, taxes, depreciation, and amortization. Specifically, the gap between the $620.63M EBITDA and the $338.74M net income highlights substantial interest payments, tax obligations, and non-operational costs impacting the final earnings figure. The free cash flow stands at -$460,208,128, indicating that the company is currently consuming cash rather than generating it, which limits immediate financial flexibility for large-scale capital expenditures or aggressive debt reduction without external financing. Profitability metrics further illustrate this dynamic, with a gross margin of 29.8% reflecting the cost of goods sold relative to sales, an operating margin of -69.6% signaling that operating expenses are currently exceeding operating income, and a profit margin of 7.6% showing the final return on revenue. On the balance sheet, the company holds $1.31B in cash against $3.05B in total debt, resulting in a debt-to-equity ratio of 96.73% that suggests a highly leveraged financial structure reliant on equity markets or cash flow to service obligations. Liquidity is supported by a current ratio of 2.10, indicating that current assets are more than twice the value of current liabilities, providing a comfortable buffer for short-term obligations despite the high leverage. Return metrics show a Return on Equity of 10.4% and a Return on Assets of 2.8%, suggesting that while management generates a solid return on the shareholder's capital, the asset base is less efficient, likely due to the heavy debt load depressing the overall return on assets.
Valuation Assessment
Valuation multiples for Harley-Davidson, Inc. include a trailing P/E ratio of 7.00 and a forward P/E of 10.42, implying that the market expects earnings to grow significantly to justify the higher multiple looking forward compared to the historical trailing earnings. The price-to-book ratio is 0.69, indicating that the stock trades at a discount to its book value, which often signals a market perception of risk or a lack of growth prospects relative to the asset base. Alternative valuation metrics such as a price-to-sales ratio of 0.51 and an EV/EBITDA of 6.34 suggest the company is priced at a fraction of its sales and enterprise value relative to earnings, highlighting a deep value perspective. The stock has traded between a 52-week high of $31.25 and a 52-week low of $17.09, placing the current price well below the recent peak and indicating significant volatility over the past year. The beta value of 1.40 reveals that the stock price is 40% more volatile than the broader market, meaning it tends to amplify market movements with greater intensity.
Growth & Income
Revenue growth for the trailing twelve months is -27.8%, while earnings growth is listed as N/A, indicating that the company is currently experiencing a contraction in sales volume which directly impacts the bottom line. The absence of positive earnings growth relative to revenue growth suggests that the decline in revenue has been severe enough to eliminate or severely constrain profitability, leaving no room for earnings to grow faster than sales in this period. Regarding income, the company offers a dividend yield of 3.7% with a payout ratio of 25.9%, demonstrating that the dividend is paid out of a small portion of earnings, which theoretically supports sustainability despite the negative operating margin. This low payout ratio allows the company to maintain shareholder returns even while navigating periods of negative free cash flow and significant debt servicing. The overall growth and income profile presents a dichotomy of high dividend yield offset by significant revenue contraction and negative free cash flow, creating a high-risk, high-reward scenario dependent on future operational recovery.