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Harley-Davidson - AI Stock Analysis

Analysis generated January 10, 2025

Harley-Davidson, Inc. (HOG) is one of the most iconic brands in the motorcycle manufacturing industry. Founded in 1903, the Milwaukee-based company is known for its heavyweight motorcycles designed for cruising on highways. Harley-Davidson is not only a manufacturer but also a lifestyle brand, boasting a community of loyal riders. However, the company has faced challenges over the past few decades related to declining sales and shifting consumer preferences. Recent financial and market data suggest cautious optimism may be warranted as well as some cause for concerns in the short to medium term.

Fundamental Analysis

Harley-Davidson reported revenues of $1.15B for the last quarter. This figure represents a 28.92% decrease compared to the previous quarter, and a 25.72% decline from the same quarter last year. Net income for the last quarter was $119M, down by 45.46% from the preceding quarter and 40.08% year-over-year. EBITDA for the last quarter stood at $180M, reflecting a 39.20% drop quarter-over-quarter and a 23.83% decline compared to the same period last year.

These steep declines signal potential trouble, particularly in the short term. However, the company's Price-to-Earnings (P/E) ratio of 6.43 is considered low, potentially indicating undervaluation. A low P/E ratio often suggests that the stock is cheap relative to its earnings, which could attract value-oriented investors.

Technical Analysis

The current stock price of Harley-Davidson is $28.32, which represents a 14.70% decrease compared to a month ago, and a 15.56% drop from a year ago. Such declines can be alarming for short-term investors. The overall trend is bearish, and the Simple Moving Average (SMA) for the last 10 days (SMA10) is 29.52, down from the previous SMA10 of 29.70. This indicates a potential downward trend in price movement.

The Relative Strength Index (RSI) currently stands at 39.3, placing it in a neutral zone. RSI values between 30 and 50 can be neutral, indicating neither overbought nor oversold conditions.

Alternative Data Analysis

Harley-Davidson has 164 open positions, up by 29% over the last couple of months, indicating a push for growth and expanding business operations, which could be a positive sign. However, only 29% of employees have a positive outlook on the company, a drop of 9% from the previous period. This points to internal challenges that could impact performance and morale.

Customer acquisition metrics show a decline, with an estimated 4 million website visitors, down by 19% in the last couple of months. On social media, Harley-Davidson maintains stable engagement metrics with 5.7M Instagram followers and 500,000 Twitter followers, showing no significant change. However, these metrics suggest a loss of interest, as reflected in the unchanged or declining numbers.

According to AltIndex’s AI score, Harley-Davidson has a score of 22, which is a strong sell signal. This score incorporates fundamental, technical, and alternative data, providing a comprehensive outlook.

Conclusion

Harley-Davidson is an iconic brand that has navigated numerous challenges over its long history. However, recent financial data reveal significant declines in revenue, net income, and EBITDA, indicating potential short-term difficulties. The low P/E ratio may attract value investors, but caution is advised due to the overall bearish market trend and low employee morale.

Alternative data further supports a cautious outlook. Although job postings have increased, employee sentiment and customer engagement metrics are concerning. The strong sell signal from AltIndex’s AI score underscores the cautious stance.

Due to these factors, a prudent recommendation would be to approach Harley-Davidson's stock with caution. Potential investors should conduct further research and consider the latest updates before making any investment decisions.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.