Motorcycles, Bicycles & Parts
Harley-Davidson, Inc. manufactures and sells motorcycles in the United States and internationally. The company operates in three segments: Harley-Davidson Motor Company, LiveWire, and Harley-Davidson Financial Services. The Harley-Davidson Motor Company segment designs, manufactures, and sells motorcycles, including cruiser, trike, touring, standard, sportbike, and dual models, as well as motorcycle parts, accessories, and apparel, as well as licenses its trademarks and related services. This segment sells its products to retail customers through a network of independent dealers, as well as e-commerce channels. The LiveWire segment sells electric motorcycles, balance bikes for kids, parts and accessories, apparel, and related parts and services. The Harley-Davidson Financial Services segment provides wholesale financing services, such as floorplan and open account financing of motorcycles, and parts and accessories; and retail financing services, such as installment lending for the purchase of new and used Harley-Davidson motorcycles, as well as point-of-sale protection products comprising motorcycle insurance, extended service contracts, and motorcycle maintenance protection. This segment also licenses third-party financial institutions that issue credit cards bearing the Harley-Davidson brand. Harley-Davidson, Inc. was founded in 1903 and is based in Milwaukee, Wisconsin.
Discounted Cash Flow Valuation of Harley-davidson, Inc.
Growth
%
%
Discount
%
%
Multiple
g\r | +10% | +11% | +12% | +13% | +14% |
---|---|---|---|---|---|
0% | 10 | 9 | 8 | 8 | 7 |
+1% | 11 | 10 | 9 | 8 | 8 |
+2% | 13 | 11 | 10 | 9 | 8 |
+3% | 14 | 13 | 11 | 10 | 9 |
+4% | 17 | 14 | 12 | 11 | 10 |
Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FCF | $603.6M | $564.4M | $527.8M | $493.6M | $461.6M | $431.6M | $403.6M | $377.4M | $353M | $330.1M | $308.7M | $3.087B |
DCF | $490.8M | $399.1M | $324.5M | $263.9M | $214.6M | $174.5M | $141.9M | $115.4M | $93.82M | $76.29M | $762.9M | |
Value | $3.058B |
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Net Margin | 13% | 12% | 9.2% | 9.3% | 7.9% | 0.032% | 12% | 13% | 12% | 11% |
ROA | 12% | 11% | 8.9% | 6.7% | 5.3% | 0.081% | 7.5% | 8.1% | 7.1% | 6.2% |
ROE | 41% | 36% | 28% | 30% | 23% | 0.075% | 25% | 25% | 21% | 19% |
The average Net Margin over the past 5 years is +9.03%.
The trend of Net Margin over the past 5 years is +1.14%.
The average ROA over the past 5 years is +5.79%.
The trend of ROA over the past 5 years is +0.52%.
The average ROE over the past 5 years is +20.96%.
The trend of ROE over the past 5 years is -0.34%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Debt FCF | 9.63 | 8.60 | 10.17 | 9.25 | 13.39 | 9.56 | 8.98 | 19.72 | 13.70 | 12.51 |
Debt Equity | 4.40 | 4.11 | 4.40 | 5.18 | 5.10 | 5.81 | 3.01 | 2.69 | 2.31 | 2.26 |
MIN | ||||||||||
Graham Stability | - | - | 68% | 81% | 73% | 0.26% | 100% | 100% | 100% | 0.26% |
The Debt/FCF trailing twelve month is 12.51.
The trend of Debt/FCF over the past 5 years is 1.16.
Graham’s Stability measure stands at 0.00.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 12-2016 | 12-2018 | 12-2020 | 12-2022 | Trend |
---|---|---|---|---|---|
Revenue | -0.39% | 0.41% | 13% | 1.4% | 1.6% |
Net Income | 0.059% | 5.5% | 710% | -6% | 1.7K% |
Stockholders Equity | 7.8% | 13% | 24% | 12% | 5.4% |
FCF | -7.1% | -11% | -19% | 38% | 0.22% |
The Revenue CAGR over the past 5 years is +0.41%.
The trend of Revenue growth rate over the past 5 years is +1.56%.
The Earnings CAGR over the past 5 years is +5.51%.
The trend of Earnings growth rate over the past 5 years is +1.67K%.
The Equity CAGR over the past 5 years is +12.89%.
The trend of Equity growth rate over the past 5 years is +5.45%.
The FCF CAGR over the past 5 years is -11.22%.
The trend of FCF growth rate over the past 5 years is +0.22%.