Holley Inc. (NYSE: HLLY)

Sector: Consumer Cyclical Industry: Auto Parts CIK: 0001822928
Market Cap 451.74 Mn
P/B 1.03
P/E -18.14
P/S 0.76
ROIC (Qtr) -5.98
Div Yield % 0.00
Rev 1y % (Qtr) 3.23
Total Debt (Qtr) 535.51 Mn
Debt/Equity (Qtr) 1.22

About

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 50.72M provide 7.63x coverage of short-term debt 6.65M, demonstrating strong liquidity position and minimal refinancing risk.
  • Cash reserves of 50.72M provide ample 7.15x coverage of acquisition spending 7.10M, enabling strategic growth opportunities.
  • Strong free cash flow of 15.43M provides 2.17x coverage of acquisition spending 7.10M, indicating disciplined M&A strategy.
  • Tangible assets of 392.45M provide robust 7.01x coverage of other current liabilities 56M, indicating strong asset backing.
  • Strong tangible asset base of 392.45M provides 55.28x coverage of acquisition spending 7.10M, enabling strategic growth.

Bear case

  • Operating cash flow of 44.19M barely covers its investment activities of (21.66M), with a coverage ratio of -2.04, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 50.72M against inventory of 195.66M, the 0.26 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Investment activities of (21.66M) provide weak support for R&D spending of 18.86M, which is -1.15x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating earnings of 30.07M show weak coverage of depreciation charges of 29.41M, with a 1.02 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 15.43M represents just -0.69x of debt issuance (22.24M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Product and Service Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Auto Parts
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ORLY O Reilly Automotive Inc 80.07 Bn 32.23 4.59 8.40 Bn
2 AZO Autozone Inc 57.24 Bn 23.23 2.97 12.05 Bn
3 APTV Aptiv PLC 19.67 Bn 66.67 0.98 8.03 Bn
4 GPC Genuine Parts Co 17.83 Bn 22.05 0.74 6.40 Bn
5 MGA Magna International Inc 15.86 Bn 15.36 0.38 7.48 Bn
6 ALV Autoliv Inc 9.72 Bn 12.92 0.92 2.19 Bn
7 MBLY Mobileye Global Inc. 9.47 Bn -28.17 4.88 0.00 Bn
8 BWA Borgwarner Inc 8.87 Bn 66.21 0.63 3.90 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.81 1.16
EV to Cash from Ops. EV/CFO 21.23 9.30
EV to Debt EV to Debt 1.75 34.64
EV to EBIT EV/EBIT 31.19 4.45
EV to EBITDA EV/EBITDA 14.85 7.40
EV to Free Cash Flow [EV/FCF] EV/FCF 60.78 17.25
EV to Market Cap EV to Market Cap 2.08 1.58
EV to Revenue EV/Rev 1.57 3.42
Price to Book Value [P/B] P/B 1.03 -0.33
Price to Earnings [P/E] P/E -18.14 11.70
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1.64
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 12.18
Dividend per Basic Share Div per Share (Qtr) 0.00 0.41
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 13.70
Interest Coverage Int. cover (Qtr) 0.58 -110.44
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -609.22 -13.49
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -0.06 27.17
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.96
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -52.60 5.41
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -31.18 -8.06
EBIT Growth (1y) % EBIT 1y % (Qtr) -59.41 -22.36
EBT Growth (1y) % EBT 1y % (Qtr) -235.42 -123.98
EPS Growth (1y) % EPS 1y % (Qtr) -269.23 -110.42
FCF Growth (1y) % FCF 1y % (Qtr) -77.93 24.26
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 9.56 16.01
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.51 0.92
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.25
Cash Ratio Cash Ratio (Qtr) 0.45 0.69
Current Ratio Curr Ratio (Qtr) 2.78 2.88
Debt to Equity Ratio Debt/Equity (Qtr) 1.22 0.22
Interest Cover Ratio Int Coverage (Qtr) 0.58 -110.44
Times Interest Earned Times Interest Earned (Qtr) 0.58 -110.44
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 9.90 -952.44
EBIT Margin % EBIT Margin % (Qtr) 5.03 -997.37
EBT Margin % EBT Margin % (Qtr) -3.64 -987.56
Gross Margin % Gross Margin % (Qtr) 43.00 -122.43
Net Profit Margin % Net Margin % (Qtr) -4.20 -979.78