What Happened?
Shares of recreational boats manufacturer Malibu Boats (NASDAQ:MBUU) fell 3.3% in the afternoon session after the stock continued to pull back as its third-quarter 2025 earnings report revealed a weak outlook that overshadowed strong results, leading to an analyst price target cut.
Although the company's revenue grew 13.5% year over year and its adjusted earnings per share of $0.15 beat Wall Street's estimates, investors focused on the guidance. Malibu anticipated that for the full fiscal year 2026, its net sales would be flat to down mid-single digits. This outlook was colored by what management described as "industry-wide retail softness" and expected wholesale declines. In response to the news, B. Riley Securities kept a Neutral rating on the shares but lowered its price target to $30.00 from $33.00.
The shares closed the day at $27.82, down 1.5% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Malibu Boats? Access our full analysis report here.
What Is The Market Telling Us
Malibu Boats’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 7.3% on the news that its third-quarter 2025 earnings report, where a weak outlook overshadowed beats on revenue and profit. The boat manufacturer's revenue grew 13.5% year over year to $194.7 million, and its adjusted earnings per share of $0.15 significantly beat Wall Street's estimates. However, investors appeared focused on future headwinds, as analysts forecast that the company's revenue will decline by 2.7% over the next 12 months. This forecast adds to existing concerns about the company's sluggish performance, which includes a 21.3% annual revenue drop over the last two years and a 14.9% annual decline in earnings per share over the last five years. Despite some quarterly improvements, the company's operating margin remained negative, highlighting ongoing profitability challenges.
Malibu Boats is down 23.4% since the beginning of the year, and at $27.87 per share, it is trading 38.5% below its 52-week high of $45.30 from November 2024. Investors who bought $1,000 worth of Malibu Boats’s shares 5 years ago would now be looking at an investment worth $542.22.
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