Holley Inc. (HLLY) stock analysis

P/E below its 5-year median

Holley's P/E of 15.7 is below its own 5-year median of 22.7.

P/E below the industry

Holley's P/E of 15.7 is below the Motor Vehicles and Motor Vehicle Equipment median of 18.1.

EV/EBITDA below its 5-year median

Holley's EV/EBITDA of 12.4 is below its 5-year median of 17.7.

P/B below the industry

Holley's price-to-book of 0.62 is below the Motor Vehicles and Motor Vehicle Equipment median of 1.66.

Trading below fair value

The share price of $2.36 is below our fair value estimate of $3.28.

Margin of safety over 20%

The price is 27.9% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -3.8% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 4.6% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew 3.0% over the last twelve months; the Motor Vehicles and Motor Vehicle Equipment median is 5.5%.

Guidance raised

Holley raised its Full Year 2026 Interest Expense (excluding collar revaluation) outlook on Aug 5, 2026.

Gross margin improving

Gross margin was 43.2% over the last twelve months, against 43.0% a year earlier.

Return on equity under 15%

Return on equity was 4.2% over the last twelve months and averaged 2.8% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 4.8%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Holley's return on equity of 4.2% is above the Motor Vehicles and Motor Vehicle Equipment median of 3.5%.

Earnings shrank over 5 years

Net income shrank 10.2% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 3.1% over the last twelve months, against a 5-year average of 1.8%.

Net margin above the industry

Holley's net margin of 3.1% is above the Motor Vehicles and Motor Vehicle Equipment median of 1.9%.

High debt

Debt is 109% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 272% five years ago to 109%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 12.9% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense 1.5 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 3.04 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 1.28; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Holley has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.