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1. Company Snapshot

1.a. Company Description

Holley Inc.designs, manufactures, and markets automotive aftermarket products for car and truck enthusiasts in the United States, Canada, Europe, and China.The company's products include carburetors, fuel pumps, fuel injection systems, nitrous oxide injection systems, superchargers, exhaust headers, mufflers, distributors, ignition components, engine tuners, automotive performance plumbing products, and exhaust products as well as shifters, converters, transmission kits, transmissions, tuners, and automotive software.


It also offers wheels, chassis and suspension products, helmets, head and neck restraints, seat belts, firesuits, and electronic control and monitoring systems.The company sells its products under the Holley, Holley EFI, APR, MSD, Flowmaster, Powerteq, Accel, and Simpson brands to retailers directly, as well as through distributors and online channel.The company was founded in 1903 and is headquartered in Bowling Green, Kentucky.

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1.b. Last Insights on HLLY

Holley Inc.'s recent performance was negatively impacted by a court ruling, which rejected the company's attempt to amend an order forcing it to disgorge $2 million in ill-gotten profits to Specialty Auto Parts U.S.A. This legal setback adds to the company's existing challenges.

1.c. Company Highlights

2. Holley Delivers Strong Q3 Results with Broad-Based Growth

Holley reported net sales of $138.4 million for Q3, representing a 3.2% increase year-over-year, with core business growth of 6.4%. Gross margin expanded to 43.2%, up 422 basis points from the prior year, driven by operational efficiencies and pricing strategies. Adjusted EBITDA margin rose to 19.6%, a significant increase of over 300 basis points year-over-year. Earnings per share (EPS) came in at $0.03, slightly below estimates of $0.04.

Publication Date: Nov -24

📋 Highlights
  • Core Business Growth:: Achieved 6.4% growth in the third quarter with broad-based performance across all divisions and 70 brands.
  • B2B Channel Momentum:: Delivered 7.3% growth, driven by $26 million in strategic initiative revenue and deeper partner engagement.
  • Margin Expansion:: Gross margin rose to 43.2% (+422 bps YoY) and adjusted EBITDA margin hit 19.6% (+>300 bps YoY).
  • Debt Reduction:: Net leverage dropped to 3.9x (vs. 4x target) with $100 million in total debt prepayments since September 2023.
  • Free Cash Flow Strength:: Generated $5.5 million in Q3, reversing a $2.1 million deficit year-over-year.

Segment Performance

The company's growth was broad-based across all channels, divisions, and within 70 brands. The B2B channel saw a 7.3% growth, driven by deepened engagement with key partners through joint planning, data integration, and expanded sales enablement tools. The Domestic Muscle division grew by 6.2% year-over-year, while the Euro & Import division climbed 16.6%.

Operational Highlights

Holley continued to improve operationally, enhancing in-stock rates for top 2,500 products and achieving efficiency gains of over $3 million. The company also prepaid $10 million in debt in October, bringing total prepayments to $100 million since September 2023, and reducing net debt-to-EBITDA leverage to 3.9x, ahead of the year-end target of 4x.

Guidance and Outlook

The company raised its full-year guidance for revenue to a range of $590 million to $605 million, implying 3.8% growth at the midpoint. Adjusted EBITDA is expected to range from $120 million to $127 million, with the bottom end of the guidance raised from $116 million. Analysts estimate next year's revenue growth at 5.1%.

Valuation Metrics

With a P/E Ratio of -15.45, P/B Ratio of 1.07, and EV/EBITDA of 18.99, the market is pricing in a certain level of growth and profitability. The company's Net Debt / EBITDA ratio stands at 9.71, indicating a significant leverage position. As Holley continues to focus on deleveraging and generating sustainable free cash flow, its valuation metrics will be closely watched by investors.

3. NewsRoom

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Holley Performance Brands Looks Ahead to 2026 with Key Advancements Across Safety, Racing and Brand Innovation at PRI Show

Dec -03

Source: globenewswire.com

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Boston Partners Raises Holdings in Holley Inc. $HLLY

Nov -29

Source: defenseworld.net

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Despite Fast-paced Momentum, Holley (HLLY) Is Still a Bargain Stock

Nov -11

Source: zacks.com

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Holley Inc. (HLLY) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

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Holley Inc. (HLLY) Q3 Earnings Lag Estimates

Nov -07

Source: zacks.com

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Holley Reports Third Quarter 2025 Results

Nov -07

Source: globenewswire.com

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Holley Performance Brands Demonstrates Strong Momentum and Product Innovation at SEMA 2025

Oct -30

Source: globenewswire.com

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Holley Performance Brands Achieves $100 Million in Debt Reduction Over the Last Two Years

Oct -27

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.81%)

6. Segments

Electronic Systems

Expected Growth: 5%

Holley Inc.'s Electronic Systems segment growth is driven by increasing demand for advanced driver-assistance systems (ADAS), electrification of vehicles, and rising adoption of autonomous vehicles. Additionally, growing need for vehicle safety, government regulations, and OEMs' focus on reducing emissions contribute to the 5% growth rate.

Mechanical Systems

Expected Growth: 3%

Holley Inc.'s Mechanical Systems segment growth is driven by increasing demand for high-performance automotive products, expansion into new markets, and strategic partnerships. Additionally, investments in research and development, and a strong brand reputation contribute to the segment's 3% growth rate.

Accessories

Expected Growth: 2%

Holley Inc.'s accessories segment growth is driven by increasing demand for high-performance vehicles, rising popularity of car customization, and expanding distribution channels. Additionally, the company's strategic partnerships and innovative product offerings, such as fuel injectors and ignition systems, contribute to its growth momentum.

Exhaust

Expected Growth: 4%

Holley Inc.'s 4% growth is driven by increasing demand for high-performance automotive products, strategic acquisitions, and expansion into new markets. Additionally, the company's focus on innovation, quality, and customer satisfaction has led to market share gains and pricing power, contributing to its growth momentum.

Safety

Expected Growth: 3%

Holley Inc.'s 3% growth is driven by increasing demand for performance automotive products, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on innovation, quality, and customer satisfaction contributes to its steady growth. Furthermore, the growing trend of vehicle customization and the rise of the automotive aftermarket industry also support Holley's growth momentum.

7. Detailed Products

Holley Carburetors

High-performance carburetors designed for street and racing applications

Holley Fuel Pumps

High-pressure fuel pumps for high-performance vehicles

Holley Ignition Systems

High-performance ignition systems for improved engine performance

Holley EFI Systems

Engine management systems for precise fuel injection and ignition control

Holley Exhaust Systems

High-performance exhaust systems for improved power and sound

Holley Intake Manifolds

High-performance intake manifolds for improved engine airflow

8. Holley Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Holley Inc. faces moderate threat from substitutes, as customers have limited alternatives for its products.

Bargaining Power Of Customers

Holley Inc. has a diverse customer base, reducing the bargaining power of individual customers.

Bargaining Power Of Suppliers

Holley Inc. relies on a few key suppliers, giving them moderate bargaining power.

Threat Of New Entrants

The automotive industry has low barriers to entry, making it easier for new entrants to compete with Holley Inc.

Intensity Of Rivalry

The automotive industry is highly competitive, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 57.18%
Debt Cost 11.64%
Equity Weight 42.82%
Equity Cost 11.64%
WACC 11.64%
Leverage 133.54%

11. Quality Control: Holley Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Dana

A-Score: 4.8/10

Value: 4.7

Growth: 3.3

Quality: 2.4

Yield: 5.0

Momentum: 9.0

Volatility: 4.7

1-Year Total Return ->

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Monro

A-Score: 4.1/10

Value: 7.3

Growth: 2.6

Quality: 2.8

Yield: 8.0

Momentum: 1.0

Volatility: 2.7

1-Year Total Return ->

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Holley

A-Score: 4.0/10

Value: 6.8

Growth: 5.9

Quality: 2.6

Yield: 0.0

Momentum: 6.5

Volatility: 2.0

1-Year Total Return ->

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American Axle

A-Score: 3.7/10

Value: 7.7

Growth: 4.0

Quality: 2.9

Yield: 0.0

Momentum: 4.0

Volatility: 3.7

1-Year Total Return ->

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Superior Industries International

A-Score: 3.1/10

Value: 10.0

Growth: 1.9

Quality: 4.4

Yield: 0.0

Momentum: 0.5

Volatility: 2.0

1-Year Total Return ->

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Commercial Vehicle Group

A-Score: 2.6/10

Value: 9.1

Growth: 0.9

Quality: 2.9

Yield: 0.0

Momentum: 1.0

Volatility: 2.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

4.3$

Current Price

4.3$

Potential

-0.00%

Expected Cash-Flows