Bear of the Day: Malibu Boats (MBUU)

Malibu Boats (MBUU) is a Zacks Rank #5 (Strong Sell) stock that designs, manufactures, and sells premium performance and recreational boats. The company offers a range of wakeboarding, waterskiing, and sport boats, targeting high-end consumers, marinas, and dealers.

The stock is trading off 2025 lows, but investors might want to stay out of the water for now. Despite strong brand recognition, the stock faces headwinds from slowing discretionary spending, rising materials costs, and potential margin pressure.

About the Company

Founded in 1982 and based in Loudon, Tennessee, Malibu employs about 2,200 people. The company generates revenue from recreational boats and aftermarket parts, but rising costs are weighing on margins.

Malibu’s portfolio includes high-performance wakeboarding and waterskiing boats under the Malibu and Axis brands, as well as custom options and service programs.

The company has a market cap of $560M and a PE of 26. The stock holds a Zacks Style Score of “B” in Growth, and “C” in both Value and Momentum.

Q1 Earnings

Malibu Boats reported first-quarter results that beat expectations by 150%. However, ongoing pressures in the recreational boat market caused gross margins to contract 210 basis points to 14.3%. This was due to higher labor and material costs and increased dealer incentives.

CEO Steve Menneto highlighted disciplined execution and dealer alignment but acknowledged the challenging market environment, noting that full-year guidance remains flat to down mid-single digits in revenue and adjusted EBITDA margins are expected at 8–9%.

CFO Bruce Beckman emphasized cost management and balance sheet strength, but near-term conditions remain soft, with no clear inflection in the broader marine market.

The company continues to expand its services ecosystem with initiatives like the Marine Business Innovations financing program, while product innovation remains strong, including the new Pathfinder 2600 and other model launches.

However, elevated inventories, a soft retail environment, and macroeconomic pressures on discretionary spending weigh on profitability and investor sentiment, reinforcing the stock’s bearish outlook.

Earnings Estimates See Recent Drop  

Since earnings, analyst estimates have fallen aggressively:

For the current quarter, estimates have dropped from $0.28 to -$0.03 over the last 60 days.

For next quarter, numbers have gone slightly higher, from $0.65 to $0.68. However, over the longer term we see the bearish theme continue.

The current year’s estimates have been lowered 7% over the last 60 days. And next year has fallen from $1.84 to $1.69, or 9%.

Malibu Boats, Inc. Price and Consensus

Malibu Boats, Inc. price-consensus-chart | Malibu Boats, Inc. Quote

Technical Take

The stock has bounced about 20% from the post earnings lows, but has since run into resistance.

The 200-day moving average at $31 was a spot that sellers came in as of late. For now, the 50-day MA is holding at $29, but if this gives way, investors might have to deal with a move to $26.50 and possibly the recent lows at $24.

In Summary

Malibu Boats faces a challenging environment despite strong brand recognition and recent product launches. Rising costs, elevated inventories, and a soft retail market are pressuring margins, while analyst estimates have been lowered across the board.

The combination of macro pressures, margin risk, and limited near-term growth makes MBUU a stock to approach with caution. Investors looking at the Leisure and Recreation industry should look at Topgolf Callaway (MODG). The stock is a Zacks Rank #1 (Strong Buy) that is trading near 2025 highs.

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This article originally published on Zacks Investment Research (zacks.com).

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