Arctic Cat (ACAT) and Fox Factory Holding Corp (NASDAQ:FOXF) Critical Analysis

Arctic Cat (NASDAQ: ACAT) and Fox Factory Holding Corp (NASDAQ:FOXF) are both cyclical consumer goods & services companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, profitabiliy, earnings, institutional ownership and dividends.

Institutional & Insider Ownership

99.5% of Arctic Cat shares are owned by institutional investors. Comparatively, 95.7% of Fox Factory Holding Corp shares are owned by institutional investors. 2.7% of Arctic Cat shares are owned by company insiders. Comparatively, 21.4% of Fox Factory Holding Corp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Arctic Cat has a beta of 1.76, suggesting that its stock price is 76% more volatile than the S&P 500. Comparatively, Fox Factory Holding Corp has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Arctic Cat and Fox Factory Holding Corp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arctic Cat 2 4 1 0 1.86
Fox Factory Holding Corp 0 5 2 0 2.29

Arctic Cat currently has a consensus price target of $17.42, suggesting a potential downside of 5.86%. Fox Factory Holding Corp has a consensus price target of $30.17, suggesting a potential downside of 18.03%. Given Arctic Cat’s higher probable upside, equities research analysts plainly believe Arctic Cat is more favorable than Fox Factory Holding Corp.

Profitability

This table compares Arctic Cat and Fox Factory Holding Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arctic Cat -31.71% -115.63% -39.31%
Fox Factory Holding Corp 9.90% 21.91% 12.40%

Valuation and Earnings

This table compares Arctic Cat and Fox Factory Holding Corp’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Arctic Cat N/A N/A N/A ($3.27) -5.66
Fox Factory Holding Corp $429.19 million 3.19 $69.55 million $1.13 32.57

Fox Factory Holding Corp has higher revenue and earnings than Arctic Cat. Arctic Cat is trading at a lower price-to-earnings ratio than Fox Factory Holding Corp, indicating that it is currently the more affordable of the two stocks.

Summary

Fox Factory Holding Corp beats Arctic Cat on 8 of the 11 factors compared between the two stocks.

Arctic Cat Company Profile

Arctic Cat Inc. (Arctic Cat) designs, engineers, manufactures and markets snowmobiles and all-terrain vehicles (ATVs) and recreational off-highway vehicles (side-by-sides or ROVs), as well as related parts, garments and accessories (PG&A). The Company offers its products under the Arctic Cat and MotorFist brand names. The Company operates through two segments: snowmobile and ATV/ROV, and PG&A. The Company produces a line of snowmobiles, consisting of approximately 60 models, marketed under the Arctic Cat brand name. Its ATVs line includes approximately 30 models. The Company offers a total of approximately 16 models under ROVs. The Company provides Arctic Cat Snowmobile, ATV and ROV parts, garments and accessories. It markets its products through a network of independent dealers located throughout the United States, Canada and Europe, and through distributors representing dealers in Europe, Russia, South America, the Middle East, China, Asia and other international markets.

Fox Factory Holding Corp Company Profile

Fox Factory Holding Corp. is engaged in the manufacturing, sale and service of ride dynamics products. The Company’s products fall into two categories: bikes, and powered vehicles, including side-by-sides, on-road vehicles with off-road capabilities, off-road vehicles and trucks, all-terrain vehicles (ATVs), snowmobiles, specialty vehicles and applications, and motorcycles. The Company’s brands include FOX, FOX RACING SHOX and RACE FACE. The Company’s products include 34 Factory Series FLOAT FIT4, which provides external adjustability with its fourth-generation FOX Isolated Technology and closed-cartridge damper, and includes a self-adjusting negative chamber air spring; X2 technology, utilized in its Factory Series FLOAT and DH rear shocks; PODIUM Internal Bypass, and X2 technology utilized in its 2.5 PODIUM shocks for side-by-sides that feature high and low speed rebound adjustment, high and low speed compression adjustment, and a dual-rate spring for the rear shocks.

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