SharkNinja, Inc. SN is scheduled to report third-quarter 2024 results on Oct. 31, before the opening bell.
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This Needham, MA-based company posted solid results in second-quarter 2024 on the back of strong demand across the business and operational excellence. Amid inflationary pressure, its adjusted earnings per share (EPS) surpassed analysts’ expectations by 20.3% and increased a whopping 51.1% year over year. Net sales also topped consensus mark by 14.7% and grew 31.4% year over year. Its second-quarter adjusted gross margin expanded 570 basis points (bps), and adjusted operating margin grew 170 bps year over year. Adjusted EBITDA also increased 90 bps to 13.4% during the second quarter.
SharkNinja, known for its household and lifestyle appliances under the Shark and Ninja brands, witnessed growth across four major product categories namely, Food Preparation Appliances, Cooking and Beverage Appliances, Cleaning Appliances and Other, which includes beauty and home environment products. Backed by the solid second-quarter performance and visibility in future, the company almost doubled its prior expectation for key metrics in 2024.
This global product design and technology company surpassed earnings estimates in the trailing four quarters with an average of 14.3%.
Earnings & Revenue Expectations for SN
The Zacks Consensus Estimate for SharkNinja’s third-quarter EPS has moved up by 2 cents to $1.14 in the past seven days. The estimated figure indicates a 20% increase on a year-over-year basis.
SharkNinja, Inc. Price and EPS Surprise
SharkNinja, Inc. price-eps-surprise | SharkNinja, Inc. Quote
The consensus estimate for sales is pegged at $1.32 billion, indicating a rise of 23.3% year over year.
What the Zacks Model Says for SharkNinja
Our proven model does not conclusively predict an earnings beat for SN this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: SharkNinja currently has an Earnings ESP of -0.37%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: SN currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Influencing SharkNinja’s Q3 Results
Amid certain challenges persistent in theglobal market SN’s net sales and earnings are expected to have increased in the third quarter of 2024. The company has been benefiting from its three-pronged growth strategy — focusing on existing categories, exploring new categories, and expanding internationally. The strategy is expected to fuel significant growth and create numerous opportunities in future.
Moreover, strong demand across the segments as well as optimizations within the supply chain, sourcing and costing strategy, and regional expansion is likely to have driven its third-quarter results.
Impressively, the company invests regularly in research and development process to enhance current products and exploring adjacent categories. It also focuses on sales and marketing of its offerings, which help it drive sales.
SharkNinja remains cautious of macroeconomic factors such as consumer confidence, demographic shifts, employment levels, inflation, and other economic indicators that could affect its performance in third quarter.
SN’s Price Performance & Valuation
SN’s shares have gained impressively in the year-to-date period (YTD). The stock has surged 115.9% YTD, outperforming the Zacks Furniture industry, the Consumer Discretionary sector and S&P 500 index.
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SharkNinja has strongly outperformed similar companies like Cricut, Inc. CRCT, Whirlpool Corporation WHR and Helen of Troy Limited HELE during the same period.
Image Source: Zacks Investment Research
From the valuation point of view, the stock is currently trading at a premium. SN’s high price-to-sales ratio compared to industry suggests that the stock is overvalued if future growth doesn’t materialize as investors’ expectations.
Should You Buy, Hold or Sell SN Before Q3?
SharkNinja continues to outperform in a challenging market, driven by its focus on newness and innovation that resonates with increasingly value-conscious consumers. The company’s growth across its four major product categories, alongside supply chain optimizations, sourcing strategies, and regional expansion, positions it for continued success despite broader industry challenges.
Although the macroeconomic risk and upcoming presidential election cautions investors, solid views, positive estimates revision and impressive price performance makes SN an attractive pick for investors at present.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
