2023-04-05 09:06:36 ET
Roth MKM initiated Fox Factory ( NASDAQ: FOXF ) with a Neutral rating on Wednesday given strong sales trends, but continued concerns on the macroeconomic environment.
“We fully credit the company for being at the forefront of innovation in all lines of its businesses and for strong relative financial performance over the past five-plus years,” equity analyst Scott Stember wrote. “However, an uncertain worldwide macro picture for 2023, outsized valuation, and additional concerns about the U.S. banking system, leave us thinking that the forward multiples are justified and reflect current risks.”
He added that there is “too much risk to be constructive at these levels” after an over 30% rally for the stock to start the year. Stember assigned the stock a $126 price target, only modestly above Monday’s closing price.
“While the company’s exemplary track record of financial performance combined with prospective growth opportunities would normally give enough reason to assign a higher valuation, overall growth concerns due to tighter consumer lending practices have added a hurdle which keeps us on the sidelines, right out of the chute,” he concluded.
Read more on the company’s latest earnings results .
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Fox Factory started at Neutral as Roth MKM sees ‘too much risk to be constructive’