2024-02-09 14:17:24 ET
Summary
- Vista Outdoor plans to separate its sporting and outdoors segments into separate entities by selling the sporting segment.
- The sale agreement has an implied enterprise value of $1.91 billion, implying a FY2024e EV/EBITDA of 5. Unless the segment's earnings fall back to pre-pandemic levels, the consideration seems low-priced.
- The remaining outdoors segment, named Revelyst, is expected to see significant improvements in efficiency and growth, but I remain conservative about my expectations for the time being.
- At the current price, Vista Outdoor could have some upside, but as the investment case is very volatile and can shift massively, I only have a hold rating for the time being.
Vista Outdoor ( VSTO ) sells outdoors & shooting sports products under a number of brands. The company's brands include Beestinger, Foresight, Bushnell, Camelbak, Federal, and Remington among many other names. Vista Outdoor outlined in 2022 that the company targets to separate its sporting and outdoors segments into separate entities, and in late 2023, the company has signed an agreement for the sale of the sporting segment....
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Vista Outdoor: A Controversial And Intriguing Segment Sale