Holley (NYSE:HLLY) Posts Quarterly Earnings Results, Hits Expectations

Key Points

• Holley reported Q1 EPS of $0.05, matching estimates, while revenue of $147.3M missed expectations; management held Adjusted EBITDA flat at $27.3M with margin expansion to 18.5%, net income rising to $7.3M and free cash flow improving to -$6.3M.
• The company is executing a portfolio rebalancing—exiting five brands, consolidating five facilities and rationalizing ~11,000 SKUs—to generate over $15M in one‑time cash and expand adjusted EBITDA margins by roughly 75–150 basis points.
• Holley closed the acquisition of HRX to bolster its Safety division and European presence and plans disciplined bolt‑on M&A, while lowering full‑year net sales guidance to $610–$640M (a ~$15M hit) but keeping adjusted EBITDA guidance at $127–$137M and targeting year‑end net leverage below 3.5x.

Holley (NYSE:HLLY - Get Free Report) released its earnings results on Wednesday. The company reported $0.05 EPS for the quarter, hitting the consensus estimate of $0.05, FiscalAI reports. Holley had a net margin of 3.13% and a return on equity of 4.84%. The company had revenue of $147.33 million during the quarter, compared to analysts' expectations of $154.00 million.

Here are the key takeaways from Holley's conference call:

• Holley reported Q1 net sales of $147.3M (down 3.7%) but held Adjusted EBITDA flat at $27.3M with margin expansion to 18.5%; net income rose to $7.3M and free cash flow improved to negative $6.3M.
• The company is executing a portfolio rebalancing—exiting 5 brands, consolidating 5 facilities and rationalizing ~11,000 SKUs—which management expects to generate >$15M in one-time cash and expand adjusted EBITDA margins by ~75–150 bps.
• Holley closed the acquisition of HRX (Italian premium racing apparel) to bolster its Safety division and European footprint, and plans a disciplined M&A program targeting 5–10 bolt-ons (typically $5–$10M revenue, double-digit growth).
• Full-year net sales guidance was lowered to $610–$640M to reflect a ~$15M hit from optimization actions, but management left adjusted EBITDA guidance unchanged at $127–$137M and expects year-end net leverage below 3.5x.
• Management said Q1 was hurt by elevated distributor inventories and severe winter weather that delayed demand, but channels began normalizing in week 8 and April showed mid-single-digit growth, carrying momentum into Q2.

Holley Price Performance

NYSE:HLLY traded down $0.40 during mid-day trading on Wednesday, hitting $2.91. 937,234 shares of the company's stock traded hands, compared to its average volume of 783,269. The company has a market cap of $351.33 million, a PE ratio of 19.30 and a beta of 1.40. Holley has a 1 year low of $1.60 and a 1 year high of $4.48. The company has a debt-to-equity ratio of 1.15, a quick ratio of 0.96 and a current ratio of 2.75. The firm's 50 day simple moving average is $3.29 and its 200 day simple moving average is $3.68.

Wall Street Analysts Forecast Growth

HLLY has been the subject of several recent analyst reports. Canaccord Genuity Group raised their target price on shares of Holley from $7.00 to $8.00 and gave the stock a "buy" rating in a research note on Wednesday, February 18th. Telsey Advisory Group restated an "outperform" rating and issued a $5.00 target price on shares of Holley in a research note on Thursday, March 5th. Weiss Ratings upgraded shares of Holley from a "sell (d)" rating to a "hold (c)" rating in a research note on Monday, March 23rd. Finally, DA Davidson set a $4.50 price objective on shares of Holley in a research note on Thursday, March 5th. Four research analysts have rated the stock with a Buy rating and two have given a Hold rating to the stock. According to data from MarketBeat, Holley currently has a consensus rating of "Moderate Buy" and an average price target of $5.00.

Institutional Investors Weigh In On Holley

Hedge funds and other institutional investors have recently modified their holdings of the company. Cerity Partners LLC purchased a new stake in shares of Holley during the second quarter worth about $25,000. Schonfeld Strategic Advisors LLC purchased a new stake in Holley in the third quarter valued at approximately $34,000. Sherbrooke Park Advisers LLC purchased a new stake in Holley in the third quarter valued at approximately $38,000. Captrust Financial Advisors purchased a new stake in Holley in the second quarter valued at approximately $44,000. Finally, Brevan Howard Capital Management LP grew its holdings in Holley by 103.4% in the second quarter. Brevan Howard Capital Management LP now owns 22,607 shares of the company's stock valued at $45,000 after purchasing an additional 11,494 shares during the period. 39.70% of the stock is currently owned by hedge funds and other institutional investors.

About Holley

Holley Inc is a designer, manufacturer and marketer of high‐performance automotive products for the enthusiast market. Through its portfolio of well‐known brands, the company develops fuel delivery systems, intake manifolds, ignition components, nitrous oxide systems, digital controls and other engine‐dress accessories tailored to both street and competition applications. Holley's products are sold through a network of domestic and international distributors, retailers and directly to professional race teams and hobbyists.

The company's product offerings span mechanical and electronic fuel injection, carburetion, engine management, add‐on power systems and calibration tools.

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