Malibu Boats Shares Plunge Following Bleak Outlook

Investors have aggressively sold off Malibu Boats stock after the company issued a disappointing quarterly earnings report and a pessimistic forecast for fiscal year 2026. The projection of flat to declining revenues coupled with contracting profit margins triggered a significant downturn in the share price.

The prevailing uncertainty is reflected in the assessments of market analysts. B. Riley Securities maintained a "Neutral" rating but reduced its price target from $33.00 to $30.00. Similarly, DA Davidson adjusted its target downward to $31.00. While Truist Financial recently raised its target to $37.00, the consensus rating among nine brokerage firms remains "Reduce," with an average price target of $37.80 and an overall "Hold" recommendation.

Quarterly Results Present a Mixed Picture

For the quarter, Malibu Boats reported a GAAP net loss of $702,000, equivalent to a loss of $0.04 per share. On an adjusted basis, which excludes one-time items, earnings came in at $0.15 per share. The company's revenue of $194.7 million surpassed expectations of $185.1 million, representing a 13.5% year-over-year increase.

However, profitability metrics showed weakness. Gross profit declined by 1.0% to $27.9 million, causing the gross margin to contract by 210 basis points to 14.3%. Despite these headwinds, the company posted a 19.1% increase in adjusted EBITDA, which reached $11.8 million with a margin of 6.1%. Malibu Boats also demonstrated solid cash generation, producing $2.5 million in free cash flow during a period that is typically challenging for the business.

Should investors sell immediately? Or is it worth buying Malibu Boats?

Management's 2026 Forecast Alarms Market

The primary driver of the stock's decline was management's guidance for the coming fiscal year. The company anticipates revenues in 2026 will be flat to down, with adjusted EBITDA margins projected between 8% and 9%. Leadership attributed this outlook to "industry-wide retail weakness" and anticipated wholesale declines across the recreational boating market. The company expects these pressures to intensify in the second quarter.

Stock Price and Market Reaction

The market's response was swift and severe:
* On Thursday, the stock plummeted 7.1%
* Shares fell to $30.46 and closed at $30.26
* The downward trend continued into Friday afternoon
* Trading volume collapsed by 71%
* The stock now trades 38.5% below its 52-week high
* Since the start of the year, the share price has declined by 23.4%

The company's market capitalization now stands at $543.43 million, with a price-to-earnings ratio of approximately 36.66.