David S. Lobel, a director at Holley Inc. (NYSE:HLLY), has recently sold a significant portion of his shares in the company. According to a filing with the Securities and Exchange Commission, Lobel sold 1,743,356 shares of Holley Inc. common stock at a price of $3.00 per share, amounting to a total transaction value of approximately $5.23 million. The transaction occurred above the current trading price of $2.76, with the company currently valued at $327 million. InvestingPro analysis indicates the stock is currently undervalued. This transaction reduced his holdings to 41,556,961 shares. The shares were sold to an unaffiliated third party, and the transaction did not affect the total number of outstanding shares. Holley Parent Holdings, LLC, doing business as Sentinel Holley Holdings, facilitated the sale. According to InvestingPro, the company maintains a FAIR financial health score, with analysts setting a consensus target significantly above current levels. InvestingPro subscribers have access to 8 additional key insights about HLLY, including detailed valuation metrics and growth forecasts.
In other recent news, Holley, the automotive aftermarket products specialist, faced a significant revenue and earnings miss in its third quarter of 2024. The company reported a 14.4% decrease in sales to $134.0 million and a 26% drop in adjusted EBITDA to $22.1 million, prompting Telsey Advisory Group and Canaccord Genuity to lower their price targets. However, both firms maintained positive ratings on the stock, with Telsey holding an Outperform rating and Canaccord maintaining a Buy.
Despite the setbacks, Holley made strides in improving operational efficiency and product innovation, leading to a Moody's (NYSE:MCO) upgrade to a B2 corporate family rating. The company also reported a significant 110% increase in direct-to-consumer sales during a marketing campaign, along with a 25% growth in new product revenue.
In response to the challenging market conditions, Holley revised its 2024 sales guidance downward to a range of $595 million to $605 million. It also lowered the adjusted EBITDA forecast to a range of $115 million to $120 million. These recent developments indicate a strategic shift in the company's approach to navigate the tough economic landscape.
Looking ahead, Holley anticipates a return to top-line growth in the first quarter of 2025, following inventory normalization. The company also expects to maintain a long-term gross margin of 40% and an EBITDA margin over 20%, reflecting its commitment to long-term profitability. This aligns with the analysts' expectations of positive organic growth in early 2025.
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