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BRP Inc (TSE:DOO)
TSX:DOO
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BRP
(TSX:DOO)
65Neutral
Positive Factors
Divestiture Strategy
The decision to sell the marine business could positively impact profitability.
Negative Factors
Marine Segment Challenges
BRP's marine segment is on track to incur significant losses, which underscores the challenges in that division.
Market Environment
The marine market has deteriorated, and BRP has had to revalue some of its assets, indicating a challenging environment.
BRP (DOO) vs. S&P 500 (SPY)
Market Cap
$4.31B
Dividend Yield1.5%
Average Volume (3M)191.60K
Price to Earnings (P/E)22.6
Beta (1Y)1.17
Revenue Growth-20.75%
EPS Growth-78.02%
CountryCA
Employees23,000
SectorConsumer Cyclical
Sector Strength49
IndustryVehicles
Share Statistics
EPS (TTM)2.58
Shares Outstanding34,490,800
10 Day Avg. Volume146,572
30 Day Avg. Volume191,604
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.50
Price to Cash Flow (P/CF)5.90
P/FCF Ratio16.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$77.40Price Target Upside37.40% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
BRP Business Overview & Revenue Model
Company DescriptionBRP Inc. (Bombardier Recreational Products), listed as DOO on the stock exchange, is a global leader in the design, manufacturing, and distribution of recreational vehicles and powersports engines. The company operates in several sectors, including snowmobiles, watercraft, on-road and off-road vehicles, and marine propulsion systems. BRP is renowned for its innovative product lines such as Ski-Doo and Lynx snowmobiles, Sea-Doo watercraft, Can-Am on- and off-road vehicles, and Rotax engines.
How the Company Makes MoneyBRP generates revenue primarily through the sale of its diverse range of recreational vehicles and powersport products. The company capitalizes on its strong brand portfolio and innovative product development to drive sales across various market segments. Key revenue streams include the sale of vehicles, parts, accessories, and services. Additionally, BRP engages in strategic partnerships and alliances that enhance its distribution network and market reach, further contributing to its earnings. The company also benefits from a robust aftermarket business, offering accessories and parts that support consumer product customization and maintenance, thereby ensuring a steady stream of revenue beyond initial sales.
BRP Financial Statement Overview
Summary
BRP showcases strong operational efficiency and cash flow management, reflected in healthy margins and improved free cash flow. However, the company faces challenges with high leverage and declining equity, posing potential risks. Despite a downturn in revenue and net income, BRP maintains operational robustness, suggesting a focus on managing costs and capital effectively.Income Statement
BRP's TTM (Trailing-Twelve-Months) revenue stands at $8.52 billion, indicating a moderate decline from the previous annual period of $10.37 billion. The gross profit margin is approximately 22.76%, with a net profit margin of 2.28%. While these margins reflect efficiency, the significant drop in net income compared to past annual data suggests potential cost challenges. EBIT and EBITDA margins are relatively strong at 7.61% and 10.88% respectively, signaling effective operational management despite revenue fluctuations.78
Positive
Balance Sheet
The debt-to-equity ratio stands at a high 5.74, indicative of significant leverage. However, the equity ratio is relatively low at 8.16%, reflecting a smaller equity base. A concerning trend is the decrease in stockholders' equity over recent years. Return on equity is relatively low at 36.67% due to the diminished net income. Overall, the balance sheet shows high leverage and potential financial risk, despite a stable asset base.70
Positive
Cash Flow
BRP's cash flow demonstrates robust operating cash flows at $907.6 million in the TTM period, with a strong operating cash flow to net income ratio of 4.66. Free cash flow has shown significant improvement, with a growth rate of over 1000% compared to the previous period's negative value, indicating improved cash management and capital allocation.85
Very Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 8.52B | 10.37B | 10.03B | 7.65B | 5.95B | 6.05B | Gross Profit |
| 1.94B | 2.60B | 2.50B | 2.13B | 1.47B | 1.45B | EBIT |
| 648.10M | 1.16B | 1.37B | 1.19B | 465.60M | 604.30M | EBITDA |
| 927.20M | 1.51B | 1.54B | 1.44B | 832.00M | 798.40M | Net Income Common Stockholders |
| 194.60M | 743.40M | 863.90M | 793.90M | 363.40M | 371.40M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 112.80M | 491.80M | 324.90M | 339.40M | 1.40B | 61.60M | Total Assets |
| 3.08B | 6.78B | 6.46B | 5.03B | 4.89B | 3.77B | Total Debt |
| 1.22B | 2.95B | 3.02B | 2.19B | 2.65B | 1.89B | Net Debt |
| 1.12B | 2.46B | 2.81B | 1.92B | 1.32B | 1.84B | Total Liabilities |
| 3.40B | 5.96B | 5.92B | 5.16B | 5.36B | 4.36B | Stockholders Equity |
| -328.00M | 808.90M | 534.90M | -135.60M | -478.70M | -589.70M |
| Cash Flow | Free Cash Flow | ||||
| 380.70M | 1.07B | -9.90M | 72.30M | 674.30M | 224.80M | Operating Cash Flow |
| 907.60M | 1.66B | 649.50M | 770.00M | 954.20M | 555.50M | Investing Cash Flow |
| -521.80M | -574.90M | -853.40M | -687.70M | -260.30M | -443.30M | Financing Cash Flow |
| -518.00M | -629.20M | 190.30M | -1.14B | 583.80M | -177.70M |
BRP Technical Analysis
Negative
56.33
Price Trends
66.65
Negative
68.64
Negative
78.25
Negative
Market Momentum
-2.59
Negative
37.24
Neutral
70.20
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:DOO, the sentiment is Negative. The current price of 56.33 is below the 20-day moving average (MA) of 58.47, below the 50-day MA of 66.65, and below the 200-day MA of 78.25, indicating a bearish trend. The MACD of -2.59 indicates Negative momentum. The RSI at 37.24 is Neutral, neither overbought nor oversold. The STOCH value of 70.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:DOO.
BRP Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | C$98.39B | 26.98 | 8.36% | 0.75% | 15.86% | -5.49% | |
74 Outperform | C$1.52B | 14.57 | 14.67% | 6.03% | 12.35% | 11.77% | |
73 Outperform | C$1.12B | 10.24 | 11.27% | 5.88% | -0.27% | -15.99% | |
71 Outperform | C$88.90B | 20.72 | 21.72% | 2.44% | 1.30% | -18.15% | |
66 Neutral | $10.13B | 17.60 | 16.05% | 2.00% | 13.32% | -13.75% | |
65 Neutral | $4.31B | 22.64 | 35.85% | 1.50% | -20.75% | -78.02% | |
60 Neutral | $12.39B | 10.47 | 1.07% | 3.58% | 1.64% | -18.33% |
* Consumer Cyclical Sector Average
Performance Comparison
TSE:DOO
BRP
56.33
-26.88
-32.30%
TSE:TFII
TFI International
117.87
-82.91
-41.29%
TSE:CP
Canadian Pacific Kansas City
105.37
-16.00
-13.18%
TSE:CNR
Canadian National Railway
137.50
-33.96
-19.81%
TSE:WTE
Westshore Terminals
24.62
0.71
2.97%
TSE:MTL
Mullen Group Ltd.
12.77
-1.18
-8.46%
BRP Earnings Call Summary
Earnings Call Date: Dec 6, 2024 | % Change Since: -16.98% | Next Earnings Date: Mar 26, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed sentiment with strong financial performance and successful strategic initiatives like inventory reduction and new product launches, contrasted by significant challenges in retail performance and market dynamics. While the company is strategically positioned for future growth, current market conditions and noncurrent inventory challenges present significant hurdles.Highlights
Revenue and Earnings Above Expectations
Revenue reached $2 billion, normalized EBITDA was $264 million, and normalized EPS was $1.16, all above expectations.
Successful Inventory Reduction
Significant progress in inventory reduction with a 22% decrease in ORV inventory, achieving the objective one quarter ahead of plan.
Can-Am Electric Motorcycle Launch
Successful launch of the Can-Am electric motorcycle lineup, with production ramping up in December and shipments starting at the beginning of fiscal '26.
International Growth
Latin America retail up 21%, driven by strong performance in ORV and personal watercraft.
Strong Position in Watercraft Market
Ended the season with the #1 position in the personal watercraft industry and a market share above pre-COVID levels.
Lowlights
North American Retail Decline
North American powersport retail was down 11%, with EMEA down 19% and personal watercraft retail down in the high 20% range.
Challenges with Noncurrent Inventory
High level of promotional activity from competitors with noncurrent units affecting market share in ORV and other segments.
Snowmobile and Seasonal Product Revenue Decline
Seasonal product revenue down 29% to $616 million, with lower shipments due to high inventory from last season.
Soft Industry Trends
Challenging market dynamics due to soft industry trends and high levels of promotional activity affecting sales.
Company Guidance
During the BRP Inc. Q3 fiscal year 2025 earnings call, the company provided guidance that reflects its strategic focus on core powersports activities following the decision to sell its marine businesses. The guidance highlighted expectations for full-year revenues between $7.6 billion and $7.8 billion, with normalized EBITDA projected to range from $1.020 billion to $1.070 billion, and normalized EPS anticipated to be between $4.25 and $4.75. BRP aims to meet its target of a 15% to 20% reduction in network inventory by the end of the fiscal year, having already achieved a 10% reduction. The company noted a decline in North American powersport retail by 11%, while international markets showed varied performance, with Latin America up 21%, EMEA down 19%, and Asia Pacific remaining flat. BRP remains confident in its ability to capture market opportunities, driven by a strong product lineup and improved inventory management.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.