The Auto-Tires-Trucks group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. LCI (LCII) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? A quick glance at the company's year-to-date performance in comparison to the rest of the Auto-Tires-Trucks sector should help us answer this question.LCI is a member of the Auto-Tires-Trucks sector. This group include ...

XPEL is up 25% YTD and up more than 44% the last three months. The boom came after their Q3 numbers in early November. The market seems opportunistic about XPEL's future potential due to strong sales growth, newHi, my name is Sander Pettersen Heio, and I’m based in Norway. My investment focus spans small-cap to mid-cap companies and foreign equities, with a particular emphasis on the Nordic market. I analyze businesses across diverse industries, identifying both established players and emerging growth leade ...

XPEL is up 25% YTD, and up more than 44% the last three months. The boom came after their Q3 numbers in early November. The market seems opportunistic about XPEL's future potential due to strong sales growth, new productHi, my name is Sander Pettersen Heio, and I’m based in Norway. My investment focus spans small-cap to mid-cap companies and foreign equities, with a particular emphasis on the Nordic market. I analyze businesses across diverse industries, identifying both established players and emerging gro ...

Financial Performance - Total revenue for the three months ended September 30, 2025, was $125.415 million, a 11.0% increase from $112.852 million in the same period of 2024 [49]. - Service revenue for the three months ended September 30, 2025, was $29.956 million, representing a 15.8% increase from $25.902 million in 2024 [49]. - The company’s total sales in the United States for the three months ended September 30, 2025, were $71.725 million, a 11.8% increase from $64.565 million in 2024 [51]. - Net income attributable to stockholders for Q3 2025 was $12,940,000, a decrease of 13.0% from $14,892,000 in Q3 2024 [74]. - Total revenue for Q3 2025 increased to $125,415,000, up 11.3% from $112,852,000 in Q3 2024 [77]. - Basic earnings per share for Q3 2025 was $0.47, down from $0.54 in Q3 2024 [74]. - Gross margin for Q3 2025 was $52,424,000, representing a gross margin percentage of 41.8%, compared to 42.4% in Q3 2024 [77]. - The unaudited pro forma revenue for the nine months ended September 30, 2025, including acquisitions, was $363,057,000, compared to $333,360,000 for the same period in 2024 [80]. Assets and Liabilities - Total property, plant, and equipment decreased from $17.735 million as of December 31, 2024, to $16.229 million as of September 30, 2025 [31]. - Goodwill increased from $44.126 million as of December 31, 2024, to $52.292 million as of September 30, 2025 [31]. - Intangible assets rose significantly from $34.562 million as of December 31, 2024, to $56.267 million as of September 30, 2025 [31]. - Finished goods inventory increased to $112.292 million as of September 30, 2025, compared to $89.556 million at the end of 2024, reflecting a 25.4% rise [56]. - Warranty liabilities increased from $0.7 million as of December 31, 2024, to $0.8 million as of September 30, 2025 [32]. - Contract liabilities increased to $5.009 million as of September 30, 2025, from $821,000 as of December 31, 2024 [48]. - The company reported a contingent liability of $25.103 million as of September 30, 2025, significantly up from $1.816 million at the end of 2024 [72]. Acquisitions and Investments - The company acquired a 76% interest in an entity conducting business in China on September 9, 2025 [40]. - The company completed acquisitions in 2025 for an aggregate purchase price of $48.7 million to expand its geographical footprint [78]. Compliance and Regulations - The company had no outstanding balances under its $125 million Credit Agreement as of September 30, 2025, and maintained compliance with all debt covenants [61]. - The company adopted ASU 2025-07 as of September 30, 2025, with no material impact on financial statements [33]. - The company is evaluating the impact of the One Big Beautiful Bill Act, expected to primarily affect deferred tax items [39]. Costs and Expenses - Personnel costs for Q3 2025 were $16,232,000, an increase of 23.6% from $13,153,000 in Q3 2024 [77]. Financial Risks - The company does not currently hedge its exposure to foreign currency translation adjustments, which may impact financial results [139]. - A hypothetical 200 basis point increase in variable interest rates could materially impact the company's financial statements [141]. Impairment and Allowances - As of September 30, 2025, accounts receivable allowances for expected credit losses were $0.1 million, down from $0.2 million as of December 31, 2024 [30]. - The company recognized no goodwill impairment during the three and nine months ended September 30, 2025 [28].

Financial Data and Key Metrics Changes - Revenue for Q3 2025 grew 11.1% to $125.4 million, marking a record quarter for the company [4] - Net income for the quarter decreased 11.8% to $13.1 million, reflecting a 10.5% net income margin [25] - EBITDA declined 8.1% to $19.9 million, with an EBITDA margin of 15.9% [25] - Year-to-date revenue grew 13.1%, while year-to-date net income increased 3.7% [25] Business Line Data and Key Metrics Changes - Total window film product line grew 22.2% in the quarter, serving as a significant growth driver [23] - Total insulation revenue increased over 21%, including product and service for dealership services [23] - Corporate-owned stores and OEM business performed solidly despite some challenges in the OEM sector [23] Market Data and Key Metrics Changes - The U.S. region revenue grew 11.1% to a record $71.7 million, while the EU region saw a 28.8% increase to $16.5 million [4] - Canada revenue declined from the prior year, continuing a trend of a slow market [6] - Latin America remained flat due to weakness in Mexico, with a shift to a direct model in Brazil impacting performance [7] Company Strategy and Development Direction - The company aims to increase gross margin by approximately 10 percentage points to around 52%-54% by the end of 2028 [15] - Focus on investing in core business and manufacturing, with plans for potential service business acquisitions within the dealership services sector [17] - The company is prioritizing investments in existing markets rather than pursuing new lines of business [14] Management's Comments on Operating Environment and Future Outlook - Management noted a mixed sentiment in the aftermarket and dealer channels, with challenges in the retail automotive business impacting consumer affordability [44][48] - The company remains optimistic about long-term growth despite current market challenges, emphasizing the importance of strategic investments [12][49] - Management expressed confidence in the integration of the recent acquisition in China and its potential to enhance direct distribution capabilities [21] Other Important Information - The acquisition of the Chinese distributor was completed for just under $53 million, with a new entity formed to manage the assets [26] - The company added approximately $22 million in inventory as part of the acquisition, which will impact cash flow positively as it is sold through [10][28] - SG&A expenses grew 20.8% in the quarter, reflecting increased costs associated with the acquisition and other operational expenses [24] Q&A Session Summary Question: Can you elaborate on the out-of-line price increases and how they were mitigated? - Management indicated that price increases impacted gross margin by about 170 basis points, but they have robust supplier options to mitigate these effects [33] Question: What is the early dealer response to the rollout of colored films? - The rollout has been well received, with expectations of market growth and increased engagement from dealerships and OEMs [37] Question: What are the revenue assumptions underpinning the expected operating margin expansion by 2028? - Management expects low double-digit organic revenue growth to continue, supporting the margin expansion goal [42] Question: Can you provide an update on sentiment across the aftermarket and dealer channel? - Sentiment is mixed, with some challenges in the retail automotive sector, but opportunities for the company to provide value in tougher conditions [44][48] Question: What is the expected impact on gross margin in Q4 and the following quarters? - A drag on gross margin is expected in Q4 due to higher-priced inventory from China, but record gross margins are anticipated in Q1 and Q2 of 2026 [50][52]

Core Viewpoint - XPEL, Inc. reported quarterly earnings of $0.47 per share, missing the Zacks Consensus Estimate of $0.48 per share, and showing a decrease from $0.54 per share a year ago, indicating an earnings surprise of -2.08% [1] Financial Performance - The company posted revenues of $125.42 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 7.18%, compared to $112.85 million in the same quarter last year [2] - Over the last four quarters, XPEL has exceeded consensus revenue estimates four times [2] Stock Performance - XPEL shares have declined approximately 12.4% since the beginning of the year, while the S&P 500 has gained 15.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.44 on revenues of $115.11 million, and for the current fiscal year, it is $1.79 on revenues of $459.82 million [7] Industry Outlook - The Automotive - Original Equipment industry, to which XPEL belongs, is currently ranked in the top 41% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

Revenue Performance - Revenue increased 11.1% to $125.4 million in the third quarter of 2025 compared to the same period in 2024[4] - Total revenue for the first nine months of 2025 increased 13.1% to $353.9 million[4] - Total revenue for Q3 2025 reached $125.415 million, a 11.4% increase from $112.852 million in Q3 2024[20] - Total product revenue increased 9.8% year-over-year, representing 76.1% of total revenue[7] - Product revenue increased to $95.459 million in Q3 2025, up from $86.950 million in Q3 2024, representing a growth of 9.3%[20] - Service revenue rose to $29.956 million in Q3 2025, compared to $25.902 million in Q3 2024, marking a 15.8% increase[20] - The company expects fourth quarter 2025 revenue of approximately $123 million to $125 million[9] Profitability Metrics - Gross margin was 41.8% in the third quarter of 2025, down from 42.5% in the third quarter of 2024[15] - EBITDA decreased 8.1% to $19.9 million, representing 15.9% of revenue in Q3 2025, compared to $21.7 million or 19.2% of revenue in Q3 2024[4] - Net income decreased 11.8% to $13.1 million, or $0.47 per share, compared to $14.9 million, or $0.54 per share in Q3 2024[4] - Operating income for Q3 2025 was $16.751 million, slightly down from $18.387 million in Q3 2024[20] - Net income for Q3 2025 was $13.135 million, a decrease from $14.892 million in Q3 2024, resulting in a net income margin of 10.5%[20] - EBITDA for Q3 2025 was $19.944 million, down from $21.698 million in Q3 2024[29] Cash Flow and Financial Position - Cash flows from operations were $33.2 million in Q3 2025, the highest quarter in the company's history[8] - The company reported a net cash provided by operating activities of $33.154 million in Q3 2025, compared to $19.559 million in Q3 2024, indicating strong operational cash flow[24] - Cash and cash equivalents increased to $64.497 million as of September 30, 2025, compared to $22.087 million at the end of 2024[22] - Total assets grew to $387.695 million as of September 30, 2025, up from $285.607 million at the end of 2024[22] Future Investments - The company plans to invest $75 million to $150 million in manufacturing and supply chain over the next two years to improve gross margin to 52%-54% by the end of 2028[3] Expenses - Sales and marketing expenses increased 29.7% year-over-year[15]

Core Insights - XPEL, Inc. is set to debut its innovative XPEL COLOR Paint Protection Film (PPF) at the 2025 SEMA Show, featuring a palette of 16 colors for vehicle personalization and protection [2][18] - The live demonstration will showcase a transformation of a 2025 BMW M5 Touring from its factory finish to a custom livery using the new COLOR PPF [2][3] - XPEL will also display an ultra-exclusive 2025 Pagani Imola Roadster, one of only eight in the world, featuring unique color-shifting paint and protected with XPEL's premium products [3][4] Product Launch - The XPEL COLOR PPF combines high-quality vehicle paint protection with customizable color options, enhancing both protection and personalization for car owners [2][18] - Live installations and demonstrations will be conducted on various vehicles, including a Mazda CX-90, to showcase the clarity, durability, and protection of XPEL products [5][4] Special Appearances - Notable guests at the SEMA Show include Will Castro, INDYCAR driver Scott McLaughlin, Moto Superbike racer P.J. Jacobsen, and championship drag racer Ryan Martin, who will participate in meet-and-greet sessions [6][7][8][9] - Will Castro will highlight his automotive mentorship program, Unique Academy USA, which trains aspiring technicians in automotive film applications [6][12] Company Overview - XPEL, Inc. is a leading provider of protective films and coatings, including automotive paint protection film, surface protection film, and ceramic coatings, with a commitment to high-quality products and customer service [11][18] - The company is publicly traded on Nasdaq under the symbol "XPEL" and has a global footprint with a network of trained installers [11][18]

Company Overview - Xpel (NASDAQ: XPEL) specializes in providing premium films and coatings primarily for automotive applications, focusing on painted surfaces and windows [1] Product Offering - The coatings offered by Xpel are generally transparent and designed to protect the finish of vehicles, making them a popular add-on for buyers of premium cars [1] Market Positioning - Xpel targets value-oriented investment ideas and special situations, particularly in the mid/small cap segment, and is open to contrarian investment opportunities that present asymmetric upside/downside potential [1]

Company Overview - Xpel (NASDAQ: XPEL) specializes in providing premium films and coatings primarily for automotive applications, focusing on painted surfaces and windows [1] Product Offering - The coatings offered by Xpel are generally transparent and designed to protect the finish of vehicles, making them appealing to buyers of premium cars [1] Market Position - Xpel's products are often considered add-ons for consumers purchasing high-end vehicles, indicating a niche market focus [1]