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Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Characteristics - Momentum investing can be risky as stocks may lose momentum if future growth does not justify high valuations [2] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, identified through tools like the Zacks Momentum Style Score [3] Group 2: Holley Inc. (HLLY) Analysis - Holley Inc. (HLLY) has shown a price increase of 23.4% over the past four weeks, indicating strong investor interest [4] - HLLY has gained 1.4% over the past 12 weeks and has a beta of 1.36, suggesting it moves 36% more than the market [5] - HLLY has a Momentum Score of B, indicating a favorable time to invest based on momentum [6] Group 3: Earnings Estimates and Valuation - HLLY has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investors [7] - The stock is trading at a Price-to-Sales ratio of 0.72, indicating it is reasonably valued at 72 cents for each dollar of sales [7] Group 4: Additional Investment Opportunities - Besides HLLY, there are other stocks that meet the criteria of "Fast-Paced Momentum at a Bargain" [8] - Investors can explore over 45 Zacks Premium Screens tailored to identify winning stock picks based on various investing styles [9]

Group 1: Holley Inc. (NYSE:HLLY) - Holley Inc. is trading at $3.62 with a target price of $2.20, indicating a potential downside of 39.35% [1][5] - The stock is excluded from coverage due to a pessimistic outlook from investment analysts [1] Group 2: Strattec Security Corporation (STRT) - Strattec Security Corporation is trading at $67.11 with a target price of $81.90, suggesting a growth potential of 22.03% [2][4][5] - The company has a market cap of $280.87 million and a price-to-earnings (P/E) ratio of 13.42, indicating financial stability [2] Group 3: MasterCraft Boat Holdings, Inc. (MCFT) - MasterCraft Boat Holdings is currently priced at $20.13 with a target price of $14.42, facing a potential downside of 28.39% [3][5] - The company has a market cap of $328.85 million, but its P/E ratio of 43.41 suggests it may be overvalued [3] - The earnings per share (EPS) of $0.81 indicates limited profitability compared to peers [3]

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Core Insights - Holley Inc. reported quarterly earnings of $0.03 per share, missing the Zacks Consensus Estimate of $0.04 per share, compared to a loss of $0.01 per share a year ago, resulting in an earnings surprise of -25.00% [1] - The company posted revenues of $138.37 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 5.02%, and showing an increase from year-ago revenues of $134.04 million [2] - Holley shares have declined approximately 9.6% year-to-date, contrasting with the S&P 500's gain of 14.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.08 on revenues of $139.34 million, and for the current fiscal year, it is $0.23 on revenues of $590.8 million [7] - The estimate revisions trend for Holley was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Automotive - Original Equipment industry, to which Holley belongs, is currently in the top 37% of over 250 Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8] - Faraday Future Intelligent Electric Inc., another company in the same industry, is expected to report a quarterly loss of $0.36 per share, reflecting a year-over-year change of +87.4%, with revenues expected to be $0.25 million, up 2400% from the year-ago quarter [9][10]

Financial Data and Key Metrics Changes - The company achieved net sales of $138.4 million for Q3 2025, reflecting a 3.2% increase compared to $134 million in the same period last year [21] - Core business growth was reported at 6.4%, marking the third consecutive quarter of year-over-year growth [22] - Gross margin improved to 43.2%, an increase of 422 basis points from 39% in the prior year [22] - Adjusted EBITDA for the quarter was $27.1 million, up from $22.1 million in the previous year, with an adjusted EBITDA margin of 19.6%, a 309 basis point improvement [23][24] - Free cash flow generation was $5.5 million, a significant improvement from a negative $2.1 million in the same quarter last year [24] Business Line Data and Key Metrics Changes - The B2B channel experienced a growth of 7.3%, driven by enhanced engagement with key partners [6] - Direct-to-consumer sales increased by 4.2% year-over-year, supported by improved promotional execution and digital performance [11] - The domestic muscle division grew by 6.2%, while the Euro and import division saw a remarkable growth of 16.6% [12][13] Market Data and Key Metrics Changes - The company reported strong engagement from its enthusiast community, with attendance at events remaining robust despite weather-related challenges [11] - E-commerce and direct-to-consumer channels performed well, with third-party marketplaces growing by 28% year-to-date [15] Company Strategy and Development Direction - The company is focused on an omnichannel strategy, enhancing customer engagement across various platforms [4] - Strategic initiatives contributed approximately $27.8 million in revenue and $6.2 million in cost savings during the quarter, reflecting disciplined execution and operational improvements [17] - The company aims to maintain gross margins above 40% and achieve adjusted EBITDA margins of 20% [56] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the fluid economic environment, citing factors such as higher unemployment and persistent inflation affecting consumer sentiment [26] - Despite these challenges, the company raised its full-year revenue guidance to a range of $590 to $605 million, reflecting confidence in its operational execution [27] - The company remains committed to strengthening its balance sheet and enhancing free cash flow generation [27] Other Important Information - The company prepaid an additional $10 million in debt, bringing total prepayments to $100 million since September 2023, marking a significant milestone in its transformation [25] - The company is focused on operational improvements and enhancing working capital management, with inventory reduction efforts ongoing [20] Q&A Session Summary Question: Pricing realization and delta explanation - Management indicated that the delta in pricing realization is due to a combination of strong B2B growth and contractual pricing not flowing through immediately [28][29] Question: Structural margin profile and sustainability - Management confirmed no structural changes affecting margins and indicated a commitment to driving continued margin acceleration [30] Question: Organic sales growth expectations for Q4 - Management noted that conservatism in guidance is due to current market conditions and the absence of a marketing calendar event from the previous year [32] Question: Impact of consumer spending changes - Management expressed confidence in consumer resilience and potential increases in demand due to discretionary income or tax refunds [34] Question: Priorities for 2026 - Management highlighted ongoing focus on strategic initiatives and operational improvements as key priorities for the upcoming year [35] Question: Inventory levels and operational decisions - Management explained that increased inventory levels were a strategic decision to enhance customer service and operational visibility [36] Question: Competitive landscape and share gains - Management stated that share gains are attributed to enhanced relationships with distributors and improved product data quality [53]

Included in this Presentation are certain financial measures that are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP") that are designed to supplement, and not substitute Holley's financial information presented in accordance with GAAP, including, but not limited to, EBITDA, Adjusted EBITDA, Adjusted EDBITDA Margin, Bank-adjusted EBITDA Leverage Ratio, Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Net Income, Adjusted Diluted EPS, and Free Cash Flow. T ...

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Financial Performance - Core business net sales increased by 6.4% to $138.4 million for Q3 2025 compared to $134.0 million in Q3 2024[6] - Net Loss narrowed to $(0.8) million, or $(0.01) per diluted share, compared to $(6.3) million, or $(0.05) per diluted share, in the prior year[6] - Adjusted EBITDA rose to $27.1 million, up from $22.1 million in Q3 2024[6] - Net sales for the thirteen weeks ended September 28, 2025, were $138,373,000, an increase of 3.2% compared to $134,038,000 for the same period in 2024[18] - Gross profit for the thirteen weeks ended September 28, 2025, was $59,839,000, reflecting a 14.4% increase from $52,306,000 in the prior year[18] - Operating income surged to $15,867,000 for the thirteen weeks ended September 28, 2025, a significant increase of 185.2% compared to $5,563,000 in the same period of 2024[18] - Net income for the thirteen weeks ended September 28, 2025, was a loss of $806,000, an improvement of 87.2% from a loss of $6,288,000 in the prior year[18] - Adjusted EBITDA for the thirteen weeks ended September 28, 2025, was $27,106 million, representing a 22.5% increase from $22,114 million in the prior year[27] - The net income margin improved to (0.6%) for the thirteen weeks ended September 28, 2025, compared to (4.7%) in the prior year[27] Cash Flow and Debt Management - Free Cash Flow improved to $5.5 million in Q3 2025, a $7 million increase from the previous year[6] - The company reported a net cash provided by operating activities of $7,430,000 for the thirteen weeks ended September 28, 2025, compared to a net cash used of $1,748,000 in the same period of 2024[22] - Total debt repayment reached $100 million since September 2023, lowering the leverage ratio to 3.9x, the lowest since 2022[5] - Total debt as of September 28, 2025, was $542,938 million, a decrease from $561,840 million at December 31, 2024[29] - The Bank-adjusted EBITDA leverage ratio was 3.91x as of September 28, 2025, compared to 4.17x at December 31, 2024[29] Guidance and Future Outlook - Full-year 2025 net sales guidance is set between $590 million and $605 million, reflecting a year-over-year growth of 2.5% to 5.1%[8] - Adjusted EBITDA guidance for the full year 2025 is projected between $120 million and $127 million[8] - The company plans to continue executing its strategic framework to drive long-term growth and operational efficiency[7] Asset and Liability Overview - Total assets increased to $1,165,114,000 as of September 28, 2025, compared to $1,133,320,000 as of December 31, 2024[20] - Cash and cash equivalents decreased to $50,723,000 as of September 28, 2025, down from $56,087,000 at the end of 2024[20] - Total liabilities rose to $725,377,000 as of September 28, 2025, compared to $712,168,000 as of December 31, 2024[20] Capital Expenditures - Capital expenditures for the thirty-nine weeks ended September 28, 2025, were $26,408,000, significantly higher than $2,727,000 in the prior year[22] Product and Market Performance - The company achieved approximately 7.3% growth in B2B channels and 4.2% growth in DTC orders in Q3 2025 compared to the same period last year[12] - Product innovation and strategic pricing initiatives contributed $11.3 million in revenue for Q3 2025 and $30.1 million year-to-date[12] - Free cash flow for the thirty-nine weeks ended September 28, 2025, was $30,319 million, down from $40,046 million in the same period of 2024[33] - Adjusted net income for the thirty-nine weeks ended September 28, 2025, was $16,535 million, compared to $12,282 million in the same period of 2024[31] - The adjusted diluted EPS for the thirty-nine weeks ended September 28, 2025, was $0.14, up from $0.10 in the same period of 2024[31]

Core Business Growth - Holley Performance Brands reported its third consecutive quarter of core business net sales growth, achieving a 6.4% increase compared to the same period last year [5][7][8] - The overall net sales for the third quarter of 2025 increased by 3.2% to $138.4 million from $134.0 million in the prior year [7][8] Financial Performance - The company generated a net loss of $(0.8) million, or $(0.01) per diluted share, significantly improved from a net loss of $(6.3) million, or $(0.05) per diluted share, in the previous year [7][19] - Adjusted EBITDA rose to $27.1 million, up from $22.1 million year-over-year, reflecting strong operational performance [7][19] - Free Cash Flow for the quarter was $5.5 million, a notable improvement of over $7 million compared to the previous year [5][7] Debt Management - Holley prepaid an additional $15 million of debt in the third quarter, bringing total repayments to $100 million since September 2023, resulting in a leverage ratio of 3.9x, the lowest since 2022 [5][7] Strategic Initiatives - The company’s strategic framework contributed approximately $27.8 million in revenue from key initiatives during the third quarter [8] - Holley experienced growth across 17 brands and all divisions, with a 7.3% increase in B2B channel sales and a 4.2% growth in direct-to-consumer (DTC) orders [13][8] Outlook - Holley has refined its full-year guidance for 2025, projecting net sales between $590 million and $605 million, representing a year-over-year growth of 2.5% to 5.1% [9][10] - Adjusted EBITDA guidance for the full year is set between $120 million and $127 million [9]