Despite some early incremental share losses this year, Malibu Boats expects to realize modest share gains in 2014 overall that are driven by an accelerated pace of innovation and distribution enhancement.
That’s according to Wells Fargo senior analyst Timothy Conder, who wrote in a report based on meetings with Malibu CEO Jack Springer and CFO Wayne Wilson that the company is posed to continue growing because of innovation, international expansion and further vertical integration.
“These factors should drive both share and margin gains,” Conder wrote, advising investors to continue using recent weakness to “aggressively build positions in this quality small-cap growth name.”
Current margins are about 30 percent, but management continues to see gross margin improvement opportunities during the next three to five years.
The acquisition of its Australian licensee, development of the Asian market and vertical integration will help the company accomplish gains, Conder wrote.
“Asian market development is viewed as a significant growth opportunity over the next three to five years, and could be enhanced post-acquisition of the company's Australian licensee,” Conder wrote.
The company’s annual capacity, using one daily shift, will increase by about 5,000 units when the current expansion is completed in December. If necessary, the capacity could be expanded by another 1,000 units for less than $1 million.