Johnson Outdoors: Valuation Appeal Outweighs Increased Downside Risks

Intrinsic Analysis
553 Followers
(13min)

Summary

  • Johnson Outdoors reported a disappointing first quarter 2025 result, with a continuation of falling sales and poor expense control.
  • The decision to spend $12m to acquire a diving equipment business has weakened the company’s balance sheet at a time when the outlook for operating cash flow is poor.
  • Given that the first fiscal quarter of the year is seasonally soft, the lack of progress on excess inventory is understandable.
  • After a sharp share price decline, Johnson Outdoors looks very cheap relative to valuation.
  • Despite a number of salient downside risk factors, a Buy rating can still be justified for investors willing to take a medium-term perspective.

Highliner

aluxum

Introduction – Investment Thesis Concerns

In December 2024, I stuck my neck out a little and upgraded Johnson Outdoors Inc (NASDAQ:JOUT) to a Buy rating. At the time of the upgrade, I noted that investors would need to

This article was written by

553 Followers
Deep experience in investment markets, including over a decade as an equity research analyst with a leading fund manager, and provision of investment consulting services to institutional clients.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

This writing is for informational purposes only. All opinions expressed herein are not investment recommendations, and are not meant to be relied upon in investment decisions. The author is not acting in an investment advisor capacity and is not a registered investment advisor. The author recommends investors consult a qualified investment advisor before making any trade. This article is not an investment research report, but an opinion written at a point in time. The author's opinions expressed herein address only a small cross-section of data related to an investment in securities mentioned. Any analysis presented is based on incomplete information, and is limited in scope and accuracy. The information and data in this article are obtained from sources believed to be reliable, but their accuracy and completeness are not guaranteed. Any and all opinions, estimates, and conclusions are based on the author's best judgment at the time of publication, and are subject to change without notice. Past performance is no guarantee of future returns.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

About JOUT Stock

SymbolLast Price% Chg
Market Cap
PE
Yield
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on JOUT

Related Stocks

SymbolLast Price% Chg
JOUT
--