On Friday, UBS updated its outlook on SharkNinja (NYSE: SN) shares, raising the price target to $83.50 from the previous $76.00, while maintaining a Buy rating on the stock.
The adjustment comes in response to the company's financial performance, prompting UBS to increase its earnings per share (EPS) forecasts for the years 2024 to 2026 by 6% to 9%.
The firm based its new price target on a discounted cash flow (DCF) analysis, which now incorporates a lower weighted average cost of capital (WACC) of 9.8%, reduced from 10.4%. This lower WACC reflects a more optimistic valuation of SharkNinja's future cash flows.
UBS anticipates that SharkNinja's stock will experience a revaluation as the market begins to more fully appreciate the company's growth narrative. According to the firm's projections, there is an expected compound annual growth rate (CAGR) of 15% in the company's EPS from 2024 to 2026.
The new price target implies a 21 times multiple of the estimated 2024 earnings per share (PE), which UBS believes is justified due to SharkNinja's robust growth prospects. The firm's outlook suggests confidence in the company's ability to sustain its earnings momentum over the coming years.
InvestingPro Insights
With a recent update from UBS raising SharkNinja's price target, investors may find additional context from InvestingPro data and insights useful. As per the latest figures, SharkNinja boasts a robust market cap of $9.92B and a high Price/Earnings (P/E) ratio of 51.39, reflecting investor optimism and a premium for its growth prospects. The company's revenue has grown by 14.43% over the last twelve months as of Q4 2023, indicating a positive trajectory in its financial performance.
Among the InvestingPro Tips, it's noteworthy that SharkNinja's net income is expected to grow this year, aligning with UBS's raised EPS forecasts. Additionally, the stock has demonstrated a strong return over the last year, with a 72.64% price total return, reinforcing the growth narrative that UBS anticipates investors to appreciate more fully. For those looking to delve deeper into SharkNinja's potential, there are additional InvestingPro Tips available, providing a comprehensive analysis of the stock's performance and outlook.
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