2024-06-20 17:55:15 ET
Summary
- Fox Factory's strategy throughout the years has been one of aggressive expansion through multiple acquisitions.
- Such strategy worked flawlessly in low interest rates environments, but is facing difficulties in recent times.
- Lower consumer sentiment towards discretionary spending might be the perfect storm for Fox Factory this year.
Summary
Fox Factory (FOXF) is facing some troubling times after a particularly large acquisition, rising interest rates and falling margins have been plaguing the company. After diving deep into their financial history, I find that the current prices seem to be reasonably fair. However, some of the qualitative aspects of the case, coupled with my view on the macro environment, make me call this a SELL instead of a HOLD.
Company overview
Fox Factory designs and manufactures vehicle accessories. Their main focus is suspension products, but they have expanded to include other peripherals as well. They are mostly known among mountain bike enthusiasts, and the sport is both the company's origin and main brands. ...
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Fox Factory: Recovery Might Take Longer