Harley-davidson, Inc.

HOG

Motorcycles, Bicycles & Parts

Mkt Cap

$4.669B

PE

7.46

Debt

$7.553B

Cash

$1.607B

EV

$10.61B

FCF

$603.6M

Market Cap

$4.669B

P/E Ratio

7.46

Debt

$7.553B

Cash

$1.607B

EV

$10.61B

FCF

$603.6M

Charts data: {"Earnings":[{"time":"2014-12-30","value":844611000},{"time":"2015-12-30","value":752207000},{"time":"2016-12-30","value":692164000},{"time":"2017-12-30","value":521759000},{"time":"2018-12-30","value":531451000},{"time":"2019-12-30","value":423635000},{"time":"2020-12-30","value":1298000},{"time":"2021-12-30","value":650024000},{"time":"2022-12-30","value":739214000},{"time":"2023-12-30","value":695046000}],"Sales":[{"time":"2014-12-30","value":6228508000},{"time":"2015-12-30","value":5995402000},{"time":"2016-12-30","value":5996458000},{"time":"2017-12-30","value":5647224000},{"time":"2018-12-30","value":5716875000},{"time":"2019-12-30","value":5361789000},{"time":"2020-12-30","value":4054377000},{"time":"2021-12-30","value":5336308000},{"time":"2022-12-30","value":5755130000},{"time":"2023-12-30","value":5836478000}],"Net Margins":[{"time":"2014-12-30","value":0.1356040644083623},{"time":"2015-12-30","value":0.12546398056377203},{"time":"2016-12-30","value":0.11542880813973849},{"time":"2017-12-30","value":0.0923921204471436},{"time":"2018-12-30","value":0.09296180168361211},{"time":"2019-12-30","value":0.0790100095322662},{"time":"2020-12-30","value":0.0003201478303571671},{"time":"2021-12-30","value":0.12181155960263164},{"time":"2022-12-30","value":0.12844436181285218},{"time":"2023-12-30","value":0.11908654500196865}],"Assets":[{"time":"2014-12-30","value":9528097000},{"time":"2015-12-30","value":9991167000},{"time":"2016-12-30","value":9890240000},{"time":"2017-12-30","value":9972672000},{"time":"2018-12-30","value":10665664000},{"time":"2019-12-30","value":10528159000},{"time":"2020-12-30","value":12010601000},{"time":"2021-12-30","value":11051055000},{"time":"2022-12-30","value":11492476000},{"time":"2023-12-30","value":12140554000}],"Stockholders Equity":[{"time":"2014-12-30","value":2909286000},{"time":"2015-12-30","value":1839654000},{"time":"2016-12-30","value":1920158000},{"time":"2017-12-30","value":1844277000},{"time":"2018-12-30","value":1773949000},{"time":"2019-12-30","value":1803999000},{"time":"2020-12-30","value":1722785000},{"time":"2021-12-30","value":2553244000},{"time":"2022-12-30","value":2906808000},{"time":"2023-12-30","value":3252808000}],"ROE":[{"time":"2014-12-30","value":0.29031556196262587},{"time":"2015-12-30","value":0.4088850403391072},{"time":"2016-12-30","value":0.36047241945714886},{"time":"2017-12-30","value":0.2829070687320831},{"time":"2018-12-30","value":0.2995864029912923},{"time":"2019-12-30","value":0.23483106143628682},{"time":"2020-12-30","value":0.0007534312174763537},{"time":"2021-12-30","value":0.25458749731713853},{"time":"2022-12-30","value":0.25430437786052607},{"time":"2023-12-30","value":0.21367569189451083}],"ROA":[{"time":"2014-12-30","value":0.13512477885143276},{"time":"2015-12-30","value":0.1163307549558525},{"time":"2016-12-30","value":0.10605768919662212},{"time":"2017-12-30","value":0.08937053178927373},{"time":"2018-12-30","value":0.06689906976255768},{"time":"2019-12-30","value":0.05294515403880203},{"time":"2020-12-30","value":0.0008058714130958143},{"time":"2021-12-30","value":0.07451225245010544},{"time":"2022-12-30","value":0.08102979723429486},{"time":"2023-12-30","value":0.0714033313471527}]}

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.

Sector

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4/1/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Harley-davidson, Inc.

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

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

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth -4.5%

Earnings Stability 1.2%

Competitiveness and MOAT

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.

The Net Margin is high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

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%

What is the average Net Margin?

The average Net Margin over the past 5 years is +9.03%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +1.14%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +5.79%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +0.52%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +20.96%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -0.34%.

Safety & Stabiliy

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.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

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%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 12.51.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 1.16.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.00.

Growth

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.

Earnings growth has been increasing in past years.

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%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +0.41%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +1.56%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +5.51%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +1.67K%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +12.89%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +5.45%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -11.22%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +0.22%.