Holley May Bear The Brunt Of Ongoing Macroeconomic Challenges, Analyst Highlights Softer Top-line Outlook

J.P. Morgan analyst Christian Carlino reiterated the Neutral rating on Holley Inc. HLLY.

Carlino has expressed concerns over a lack of catalysts for growth and the ongoing macroeconomic challenges affecting the company.

While the 2025 guidance suggests that Holley could achieve its target of a 20% EBITDA margin, the analyst notes that the overall sentiment may be impacted by a “softer” top-line outlook.

The valuation is strongest at the top of the income statement, but the softer revenue projections are likely to drive sentiment, given the current consumer environment, analyst writes.

According to Carlino, Holley’s market share performance in the fourth quarter is impacted by distribution partners reducing safety stock due to the company’s enhanced supply chain capabilities.

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On a positive note, direct-to-consumer sales grew by 8% in the fourth quarter, helped by improved marketing efforts, and sales through national retailers increased by 12% due to expanded SKU offerings and retailers consolidating purchases with more reliable suppliers.

Holley’s sales guidance for the year is weighted toward the second half, with softer consumer confidence and weather pressures affecting the first quarter.

The analyst is forecasting first-quarter sales of $144 million, a 2% organic decline, and total sales for the year at $590 million, down 2% year-over-year, with organic growth at 2.5%.

Price Action: HLLY shares are trading higher by 0.61% to $2.485 at last check Thursday.

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