HLLY – Market expectations are for Uniform ROA to decline; management may have concerns about demand, acquisitions, and supply chain disruptions

January 19, 2022

  • Holley (APH) currently trades near corporate averages relative to Uniform earnings, with a 20.3x Uniform P/E (Fwd. V/E’).
  • At these levels, markets are pricing in expectations for Uniform ROA to decline to 22%, accompanied by 12% Uniform asset growth.
  • Meanwhile, analysts expect Uniform ROA to compress to 34% in 2022, accompanied by 25% Uniform asset growth.
  • If sustained going forward, these levels would imply a stock price closer to $37, representing significant potential equity upside for the firm.
  • That said, the firm’s most recent earnings call suggests management may have concerns about demand, acquisitions, and supply chain disruptions.

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