Harley-Davidson HOG

NYSE HOG

$27.06 -0.14 (-0.50%)

As of: Sep 9, 2026 · 9:52 AM EDT

Key Stats

Market Cap2.85 Bn

P/E14.55

P/S0.67

Div. Yield0.03

Total Debt (Qtr)2.86 Bn

Revenue Growth (1y) (Qtr)-5.86

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About

Harley-Davidson, Inc. designs manufactures and sells motorcycles and related products worldwide. The company also provides financial services to support motorcycle purchases and offers branded apparel parts accessories and licensing. Founded in 1903 Harley-Davidson has built a strong heritage in the motorcycle industry and continues to serve riders through a global network of independent dealers. The company generates revenue primarily from the sale of motorcycles parts…

The company generates revenue primarily from the sale of motorcycles parts accessories apparel and licensed products through its Harley-Davidson Motor Company segment. Revenue also comes from electric motorcycles and related items sold under the LiveWire brand. Additionally Harley-Davidson Financial Services earns interest and fees from wholesale floorplan financing retail consumer loans insurance services and other financial products offered to dealers and customers.

The company operates through the following segments: Harley-Davidson Motor Company LiveWire and Harley-Davidson Financial Services.

Harley-Davidson Motor Company designs manufactures and sells internal combustion engine motorcycles under the Harley-Davidson brand. It also sells motorcycle parts accessories apparel and licenses its trademarks. The segment distributes products through a global network of independent dealers and through e-commerce channels in certain regions.
LiveWire focuses on electric motorcycles electric balance bikes electric bikes and related parts accessories and apparel. It sells these products wholesale to independent retail partners and directly to consumers via company owned dealers and online platforms. LiveWire also manages its own research development and manufacturing arrangements through partnerships with contract assemblers.
Harley-Davidson Financial Services provides wholesale inventory financing to dealers and retail consumer loans to buyers of Harley-Davidson and LiveWire motorcycles. The segment also offers motorcycle insurance voluntary protection products and has licensing arrangements with third party financial institutions that issue branded credit cards. Its operations are centered in the United States and Canada.

Harley-Davidson holds a leading position in the premium motorcycle market distinguished by its iconic brand recognition and strong customer loyalty. The company competes with manufacturers such as Honda Yamaha BMW Ducati and Indian Motorcycle. Its competitive advantages include a distinctive product design a reliable dealer network favorable financing options through its financial services unit and a powerful licensing program that extends the brand beyond motorcycles.

The company serves individual riders enthusiasts and motorcycle lovers who purchase motorcycles parts accessories apparel and related services. It also supports independent dealers who act as the primary retail channel for its products. Additionally Harley-Davidson Financial Services serves dealers seeking inventory financing and consumers seeking loans or insurance for their motorcycle purchases.

Investment Thesis

▲ Bull case

Harley-Davidson is strategically repositioning itself to capture significant untapped demand through accessible entry-level models like the Sprint and the return of the Sportster in 2027, which directly addresses the historical barrier of high pricing that limited rider acquisition and retention. Management explicitly stated that the Sprint, priced around $6,000 with a 440cc engine, targets younger riders seeking maneuverability and affordability, while the revived Sportster at approximately $10,000 with an air-cooled engine appeals to budget-conscious purists, creating a dual-pronged approach to expand the total addressable market. This portfolio shift is not merely incremental but represents a deliberate realignment to leverage the brand's heritage in customization and accessibility, which historically drove volume growth before recent years' focus on high-margin Touring models alienated broader segments. Crucially, these models are designed as 'blank-canvas' platforms specifically engineered for aftermarket customization, creating a structural tailwind for Parts and Accessories (P&A) attachment rates—a high-margin revenue stream the company is actively revitalizing by reinstating 30% of previously eliminated SKUs and integrating P&A into launch processes with HDFS financing solutions. The early success in Latin America (21% retail sales growth) and EMEA market share doubling from 2% to 4% driven by Adventure Touring models demonstrates that when product aligns with regional preferences and dealer sell-through improves, Harley-Davidson can regain share even in softer international environments, validating the strategy's core thesis that accessibility and customization drive sustainable volume. Furthermore, the company's shift to a disciplined, targeted marketing approach under the 'Ride' platform—moving away from heavy promotions toward top-of-funnel brand-building and community engagement—protects margin integrity while building long-term brand relevance, as evidenced by the positive early reception cited by management and the improved sell-through of current model year inventory (now two-thirds of dealer stock in North America versus less than half prior year), which reduces reliance on discounting and supports premium positioning.
The 'Back to the Bricks' strategy is unlocking substantial structural value through enterprise-wide economics that extend far beyond new motorcycle sales, creating a self-reinforcing cycle where increased volumes drive profitability across the entire ownership lifecycle—P&A, Service, Finance and Insurance, and the used market—thereby diversifying revenue streams and reducing dependence on any single product's cyclical performance. Management emphasized that a motorcycle generates value over its full life cycle, and by increasing new motorcycle volumes through accessible models like Sprint and Sportster, the company expands the base of motorcycles in the market, which fuels downstream revenue across P&A (targeting 20%-30% sales growth), Apparel, Licensing, and HDFS financing solutions, with explicit plans to leverage HDFS to drive P&A sales and strengthen dealer financing penetration. This approach directly addresses the historical pain point where declining volumes compressed dealer profitability and limited P&A performance, as lower traffic reduced attachment rates and service opportunities; now, by aligning dealer economics with corporate success through inventory rightsizing, better promotion alignment, and structural improvements to dealer programs, the company is creating a win-win model where dealer profitability is non-negotiable and directly linked to shareholder value, as stated by Arthur Starrs. The strategy's focus on restoring dealer profitability is already yielding results, with global dealer inventory down 22% year-over-year and healthier, more current model year positioning, which management believes will pay dividends in future periods by reducing the need for OEM promotional support and preserving premium positioning—critical for sustaining margin expansion as volumes recover. Additionally, the capital-light transformation of HDFS, while reducing near-term revenue, is positioning the segment for improved returns and reduced capital intensity, with a long-term outlook of $125 million to $150 million in operating income by 2029, freeing up balance sheet flexibility to reinvest in high-leverage areas like P&A expansion and motorcycle portfolio development without incremental capital investment, as the company leverages existing platforms and powertrains to bring new models to market in a capital-efficient manner.
Harley-Davidson is executing a credible, multi-year cost reduction initiative that is already delivering tangible benefits and will significantly improve operating leverage as volumes recover, with at least $150 million in annual run-rate fixed cost reductions targeted by 2027 versus 2025 baselines, and early actions including $15 million in restructuring charges and $34 million in higher warranty costs from recalls being absorbed as part of this broader effort to rightsize the cost base. This cost discipline is not a temporary measure but a structural shift aimed at decreasing operating expenses below 20% of sales (from 25% in 2025) while driving gross margins back toward the medium-term target of approaching 30%, supported by prior tariff recovery settlements, favorable currency movements, and the sequential decline in tariff impacts through 2026 (expected $75 million to $90 million for the full year, down from an earlier $105 million estimate). The company's financial foundation remains exceptionally strong, with $1.8 billion in cash and equivalents providing ample liquidity to fund strategic investments in the Ride marketing platform, P&A growth initiatives, and dealer incentive programs without compromising shareholder returns, as evidenced by the continued execution of share repurchases (6.6 million shares worth $128 million in Q1 2026, totaling 26.8 million shares or $726 million since the 2024 announcement) and the approval of a $0.1875 per share dividend for Q2 2026. Critically, management is shifting capital allocation philosophy away from the prior $1 billion share repurchase program toward reinvesting in the business where growth opportunities exist—such as the Sprint launch, Sportster revival, and P&A expansion—while still maintaining a commitment to returning capital through buybacks and dividends, creating a balanced approach that fuels both near-term execution and long-term value creation. The LiveWire segment, though still operating at a loss, shows promising traction with 87% revenue growth and an 11% reduction in operating loss, supported by gross profit gains and lower operating costs, with net cash used by operating activities improving by over 25% year-over-year, signaling that even the EV segment is on a path toward cash flow positivity and could eventually contribute to the enterprise model through technology transfer or brand extension in adjacent mobility solutions.

Harley-Davidson is strategically repositioning itself to capture significant untapped demand through accessible entry-level models like the Sprint and the return of the Sportster in 2027, which directly addresses the historical barrier of high pricing that limited rider acquisition and retention. Management explicitly stated that the Sprint, priced around $6,000 with a 440cc engine, targets younger riders seeking maneuverability and affordability, while the revived Sportster at approximately $10,000 with an air-cooled engine appeals to budget-conscious purists, creating a dual-pronged approach to expand the total addressable market. This portfolio shift is not merely incremental but represents a deliberate realignment to leverage the brand's heritage in customization and accessibility, which historically drove volume growth before recent years' focus on high-margin Touring models alienated broader segments. Crucially, these models are designed as 'blank-canvas' platforms specifically engineered for aftermarket customization, creating a structural tailwind for Parts and Accessories (P&A) attachment rates—a high-margin revenue stream the company is actively revitalizing by reinstating 30% of previously eliminated SKUs and integrating P&A into launch processes with HDFS financing solutions. The early success in Latin America (21% retail sales growth) and EMEA market share doubling from 2% to 4% driven by Adventure Touring models demonstrates that when product aligns with regional preferences and dealer sell-through improves, Harley-Davidson can regain share even in softer international environments, validating the strategy's core thesis that accessibility and customization drive sustainable volume. Furthermore, the company's shift to a disciplined, targeted marketing approach under the 'Ride' platform—moving away from heavy promotions toward top-of-funnel brand-building and community engagement—protects margin integrity while building long-term brand relevance, as evidenced by the positive early reception cited by management and the improved sell-through of current model year inventory (now two-thirds of dealer stock in North America versus less than half prior year), which reduces reliance on discounting and supports premium positioning.
The 'Back to the Bricks' strategy is unlocking substantial structural value through enterprise-wide economics that extend far beyond new motorcycle sales, creating a self-reinforcing cycle where increased volumes drive profitability across the entire ownership lifecycle—P&A, Service, Finance and Insurance, and the used market—thereby diversifying revenue streams and reducing dependence on any single product's cyclical performance. Management emphasized that a motorcycle generates value over its full life cycle, and by increasing new motorcycle volumes through accessible models like Sprint and Sportster, the company expands the base of motorcycles in the market, which fuels downstream revenue across P&A (targeting 20%-30% sales growth), Apparel, Licensing, and HDFS financing solutions, with explicit plans to leverage HDFS to drive P&A sales and strengthen dealer financing penetration. This approach directly addresses the historical pain point where declining volumes compressed dealer profitability and limited P&A performance, as lower traffic reduced attachment rates and service opportunities; now, by aligning dealer economics with corporate success through inventory rightsizing, better promotion alignment, and structural improvements to dealer programs, the company is creating a win-win model where dealer profitability is non-negotiable and directly linked to shareholder value, as stated by Arthur Starrs. The strategy's focus on restoring dealer profitability is already yielding results, with global dealer inventory down 22% year-over-year and healthier, more current model year positioning, which management believes will pay dividends in future periods by reducing the need for OEM promotional support and preserving premium positioning—critical for sustaining margin expansion as volumes recover. Additionally, the capital-light transformation of HDFS, while reducing near-term revenue, is positioning the segment for improved returns and reduced capital intensity, with a long-term outlook of $125 million to $150 million in operating income by 2029, freeing up balance sheet flexibility to reinvest in high-leverage areas like P&A expansion and motorcycle portfolio development without incremental capital investment, as the company leverages existing platforms and powertrains to bring new models to market in a capital-efficient manner.
Harley-Davidson is executing a credible, multi-year cost reduction initiative that is already delivering tangible benefits and will significantly improve operating leverage as volumes recover, with at least $150 million in annual run-rate fixed cost reductions targeted by 2027 versus 2025 baselines, and early actions including $15 million in restructuring charges and $34 million in higher warranty costs from recalls being absorbed as part of this broader effort to rightsize the cost base. This cost discipline is not a temporary measure but a structural shift aimed at decreasing operating expenses below 20% of sales (from 25% in 2025) while driving gross margins back toward the medium-term target of approaching 30%, supported by prior tariff recovery settlements, favorable currency movements, and the sequential decline in tariff impacts through 2026 (expected $75 million to $90 million for the full year, down from an earlier $105 million estimate). The company's financial foundation remains exceptionally strong, with $1.8 billion in cash and equivalents providing ample liquidity to fund strategic investments in the Ride marketing platform, P&A growth initiatives, and dealer incentive programs without compromising shareholder returns, as evidenced by the continued execution of share repurchases (6.6 million shares worth $128 million in Q1 2026, totaling 26.8 million shares or $726 million since the 2024 announcement) and the approval of a $0.1875 per share dividend for Q2 2026. Critically, management is shifting capital allocation philosophy away from the prior $1 billion share repurchase program toward reinvesting in the business where growth opportunities exist—such as the Sprint launch, Sportster revival, and P&A expansion—while still maintaining a commitment to returning capital through buybacks and dividends, creating a balanced approach that fuels both near-term execution and long-term value creation. The LiveWire segment, though still operating at a loss, shows promising traction with 87% revenue growth and an 11% reduction in operating loss, supported by gross profit gains and lower operating costs, with net cash used by operating activities improving by over 25% year-over-year, signaling that even the EV segment is on a path toward cash flow positivity and could eventually contribute to the enterprise model through technology transfer or brand extension in adjacent mobility solutions.

▼ Bear case

Harley-Davidson's core motorcycle business (HDMC) remains structurally challenged by persistent margin compression and volatile demand patterns that the 'Back to the Bricks' strategy has yet to demonstrably reverse, as evidenced by Q1 2026 results where gross margin fell to 25.3% from 29.1% year-over-year—a 3.8 percentage point decline driven by $45 million in tariff costs, negative pricing/incentive mix, lower volumes, and supply management costs, with only partial offsets from prior tariff recoveries and currency gains. Despite management's optimism, the company has not provided clear evidence that the margin erosion from tariffs and unfavorable mix is temporary; in fact, they acknowledged that tariff costs are expected to total $75 million to $90 million for the full year 2026, representing a significant and ongoing headwind that directly impacts profitability, especially given that three of four manufacturing centers are US-based and the company continues to face pressures from U.S. tariffs on imported components like semiconductors, which constitute about 25% of its supply chain. Furthermore, while North American retail sales grew 14% (US up 16%, Canada down 8%), this growth was heavily reliant on Touring and Trike models and targeted incentives, raising concerns about the sustainability of volume gains without continued promotional spend, which management admits they are shifting away from—a strategy that could undermine the very volume recovery they seek if not replaced by genuine organic demand. The wholesale shipment decline of 3% year-over-year to 37,300 units, coupled with dealers requesting more inventory for specific models and trim levels, indicates a potential mismatch between production and actual retail demand, suggesting that the reported retail growth may be drawing down existing dealer inventory rather than reflecting true end-consumer strength, a risk amplified by the company's expectation of a more balanced annual cadence with lower shipments in Q3, which could lead to stockouts and lost sales during peak season.
The capital-light transition of Harley-Davidson Financial Services (HDFS), while strategically intended to reduce risk, has materially altered the segment's financial profile in a way that creates near-term earnings volatility and long-term uncertainty, as HDFS revenue plummeted 54% to $112 million in Q1 2026 due to lower interest income from the sold retail loan book, and although operating income margin held at 19.9% due to prudent expense management, the segment's contribution to consolidated earnings has become significantly less predictable and less scalable than before the transaction. Management's long-term outlook for HDFS—targeting $125 million to $150 million in operating income by 2029—is highly contingent on successful expansion of high-value finance and insurance products, optimized offers supporting motorcycle sales, and increased dealer penetration rates, all of which face execution risks in a competitive powersports financing landscape where third-party lenders may offer more attractive terms, and where the company's ability to leverage HDFS to drive P&A sales depends on seamless integration with dealer incentives and financing solutions that have yet to be proven at scale. Moreover, the classification of new retail finance receivables under the forward flow arrangement as held for sale under US GAAP is artificially suppressing operating cash flow, as evidenced by the $228 million net cash used in operating activities versus a $142 million inflow in the prior year, a non-cash accounting effect that obscures true operational cash generation and could mislead investors about the company's underlying financial health, particularly as this item will remain a distinct year-over-year drag throughout 2026.
Harley-Davidson's ambitious financial targets, including over $350 million in HDMC EBITDA by 2027 and mid-single-digit retail unit growth over the medium term, rely heavily on assumptions that may not materialize given the company's execution history and external headwinds, particularly the ability to sustain volume growth without reverting to destructive promotional cycles that erode margins, the success of new model launches like the Sprint (2026) and Sportster (2027) in capturing meaningful share from entrenched competitors in the entry-level and mid-tier segments, and the realization of 20%-30% P&A sales growth through reinstating SKUs and aligning with launch processes—all of which require precise coordination across product development, marketing, dealer networks, and supply chains that have historically underperformed in these areas. The company's own cautionary notes highlight significant risks, including the impact of new or reinstated tariffs on raw material costs, the challenge of accurately predicting segment margins amid inflation and currency volatility, and the difficulty of maintaining brand value amid activist collective actions or boycotts, which could be triggered by perceived missteps in cultural alignment or pricing strategy as the company attempts to broaden its appeal beyond its traditional core. Additionally, while management cites cost savings of at least $150 million in annual run-rate fixed cost reductions by 2027, they have not detailed how these savings will be achieved beyond restructuring and warranty costs, leaving open the possibility that further cuts could impair critical functions in R&D, marketing, or quality control, potentially undermining the very product innovation and accessibility goals central to the 'Back to the Bricks' plan, and the reliance on favorable currency movements and prior tariff recoveries to offset current tariff costs introduces unpredictability that could reverse if macroeconomic conditions shift adversely.

Harley-Davidson's core motorcycle business (HDMC) remains structurally challenged by persistent margin compression and volatile demand patterns that the 'Back to the Bricks' strategy has yet to demonstrably reverse, as evidenced by Q1 2026 results where gross margin fell to 25.3% from 29.1% year-over-year—a 3.8 percentage point decline driven by $45 million in tariff costs, negative pricing/incentive mix, lower volumes, and supply management costs, with only partial offsets from prior tariff recoveries and currency gains. Despite management's optimism, the company has not provided clear evidence that the margin erosion from tariffs and unfavorable mix is temporary; in fact, they acknowledged that tariff costs are expected to total $75 million to $90 million for the full year 2026, representing a significant and ongoing headwind that directly impacts profitability, especially given that three of four manufacturing centers are US-based and the company continues to face pressures from U.S. tariffs on imported components like semiconductors, which constitute about 25% of its supply chain. Furthermore, while North American retail sales grew 14% (US up 16%, Canada down 8%), this growth was heavily reliant on Touring and Trike models and targeted incentives, raising concerns about the sustainability of volume gains without continued promotional spend, which management admits they are shifting away from—a strategy that could undermine the very volume recovery they seek if not replaced by genuine organic demand. The wholesale shipment decline of 3% year-over-year to 37,300 units, coupled with dealers requesting more inventory for specific models and trim levels, indicates a potential mismatch between production and actual retail demand, suggesting that the reported retail growth may be drawing down existing dealer inventory rather than reflecting true end-consumer strength, a risk amplified by the company's expectation of a more balanced annual cadence with lower shipments in Q3, which could lead to stockouts and lost sales during peak season.
The capital-light transition of Harley-Davidson Financial Services (HDFS), while strategically intended to reduce risk, has materially altered the segment's financial profile in a way that creates near-term earnings volatility and long-term uncertainty, as HDFS revenue plummeted 54% to $112 million in Q1 2026 due to lower interest income from the sold retail loan book, and although operating income margin held at 19.9% due to prudent expense management, the segment's contribution to consolidated earnings has become significantly less predictable and less scalable than before the transaction. Management's long-term outlook for HDFS—targeting $125 million to $150 million in operating income by 2029—is highly contingent on successful expansion of high-value finance and insurance products, optimized offers supporting motorcycle sales, and increased dealer penetration rates, all of which face execution risks in a competitive powersports financing landscape where third-party lenders may offer more attractive terms, and where the company's ability to leverage HDFS to drive P&A sales depends on seamless integration with dealer incentives and financing solutions that have yet to be proven at scale. Moreover, the classification of new retail finance receivables under the forward flow arrangement as held for sale under US GAAP is artificially suppressing operating cash flow, as evidenced by the $228 million net cash used in operating activities versus a $142 million inflow in the prior year, a non-cash accounting effect that obscures true operational cash generation and could mislead investors about the company's underlying financial health, particularly as this item will remain a distinct year-over-year drag throughout 2026.
Harley-Davidson's ambitious financial targets, including over $350 million in HDMC EBITDA by 2027 and mid-single-digit retail unit growth over the medium term, rely heavily on assumptions that may not materialize given the company's execution history and external headwinds, particularly the ability to sustain volume growth without reverting to destructive promotional cycles that erode margins, the success of new model launches like the Sprint (2026) and Sportster (2027) in capturing meaningful share from entrenched competitors in the entry-level and mid-tier segments, and the realization of 20%-30% P&A sales growth through reinstating SKUs and aligning with launch processes—all of which require precise coordination across product development, marketing, dealer networks, and supply chains that have historically underperformed in these areas. The company's own cautionary notes highlight significant risks, including the impact of new or reinstated tariffs on raw material costs, the challenge of accurately predicting segment margins amid inflation and currency volatility, and the difficulty of maintaining brand value amid activist collective actions or boycotts, which could be triggered by perceived missteps in cultural alignment or pricing strategy as the company attempts to broaden its appeal beyond its traditional core. Additionally, while management cites cost savings of at least $150 million in annual run-rate fixed cost reductions by 2027, they have not detailed how these savings will be achieved beyond restructuring and warranty costs, leaving open the possibility that further cuts could impair critical functions in R&D, marketing, or quality control, potentially undermining the very product innovation and accessibility goals central to the 'Back to the Bricks' plan, and the reliance on favorable currency movements and prior tariff recoveries to offset current tariff costs introduces unpredictability that could reverse if macroeconomic conditions shift adversely.

Statement Business Segments Breakdown of Revenue (2025)

Peer group

Peer Comparison

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1	THO	Thor Industries Inc	primary	3.85 Bn	14.83	0.39	0.94 Bn
2	PII	Polaris Inc.	primary	3.46 Bn	-	-	1.95 Bn
3	HOG	Harley-Davidson, Inc.	primary	2.85 Bn	14.55	0.67	2.86 Bn
4	BC-PC	Brunswick Corp	primary	1.60 Bn	-40.93	0.28	2.10 Bn
5	WGO	Winnebago Industries Inc	primary	0.83 Bn	21.56	0.29	0.44 Bn
6	MBUU	Malibu Boats, Inc.	primary	0.51 Bn	298.85	0.56	0.17 Bn
7	MCFT	MasterCraft Boat Holdings, Inc.	primary	0.38 Bn	44.76	1.27	-
8	NIU	Niu Technologies	primary	0.16 Bn	-4.82	0.24	0.10 Bn

Harley-Davidson HOG

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Investment Thesis

Segments Breakdown of Revenue (2025)

Statement Business Segments Breakdown of Revenue (2025)

Peer Comparison

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