SharkNinja Inc. (NYSE: SN) started as a quirky outfit hawking products via infomercials. Today, the company has become a consumer appliance and home goods powerhouse. It's also a member of the consumer discretionary sector.
SharkNinja has grown its portfolio of vacuums, blenders, fryers, cookware, juicers and beauty products into a well-known global brand with products sold direct-to-consumer (DTC). In fact, the company revolutionized infomercial marketing.
Today, the company is a reputable home appliance brand. It's products can be found in brick-and-mortar channels that include reputable retailers and department stores like Macy's Inc. (NYSE: M) and Kohl's Co. (NYSE: KSS), Target Co. (NYSE: TGT) and Walmart Inc. (NYSE: WMT).
Spin-off debut on the NYSE
Unlike most publicly listed companies that go public via an initial public offering (IPO) or SPAC reverse merger, SharkNinja went public as an independent spin-off from JS Global Lifestyle Co. on June 31, 2023. The company was originally called Euro-Pro Operating LLC, which was a small family-run operation that started with sewing machines and eventually vacuum machines. It focused on Shark brands for vacuum cleaners and small home appliances. The company launched the Ninja brand of kitchen appliances with blenders and food processors.
Product portfolio
In 2015, the company combined both brands under the SharkNinja name. Its popularity can be attributed to its infomercial marketing. The company expanded its portfolio of wares split into the Shark home appliances and Ninja kitchen appliances which includes steam mops, wet vacuums, robot vacuums, air fryers, indoor/outdoor grills, juicers, cleaning supplies, hair care products, cutlery, bakeware, drink systems, toasters, and coffee and tea machines.
Blowout numbers debut
On November 9, 2023, SharkNinja released its first earnings report as a public company. The company reported earnings of 95 cents per share, beating analyst estimates by 14 cents. Gross margin rose 920 bps. Adjusted net income rose 34% to $133 million. Adjusted EBITDA rose 38.4% to $208.7 million. Revenues rose 13.1% YoY to $1.07 billion, beating analyst estimates of $1 billion. The Board of Directors approved a one-time special dividend payout of $1.08 per share.
Upside guidance
SharkNinja raised its full-year 2023 forecasts for EPS of $3.06 to $3.14 versus $2.98 consensus analyst estimates. Net sales are expected to rise 11.5% to 12.5%. SharkNinja CEO Mark Barrocas commented, "We continue to deliver on our three-pillar growth strategy of gaining market share in existing categories, entering new and adjacent categories and international expansion. We are leveraging our disruptive innovation engine, our highly effective go-to-market strategy, and our efficient supply chain as we strive to deliver industry-leading growth and profitability." He concluded, "We have good momentum as we head into the holiday season. As we look into our future, I'm excited about the tremendous whitespace in front of us.
Analyst pre-earnings ratings initiations
As with most companies that go public, analysts liked to jump on the bandwagon with their initial ratings. Prior to its Q3 2023 earnings release, several analysts initiated ratings on SJ stock. On September 11, 2023, Jeffries started SharkNinja with a Buy rating and a $67 price target. On September 27, 2023, William Blair initiated an Outperform rating. On October 25, 2023, Goldman Sachs initiated SN with a Buy rating and a $52 price target.
Jeffries post-earnings comments
On November 14, 2023, Jeffries highlighted SN as its "new number one" idea. Analyst Randal Konik commented, "While management noted that 3Q GM gains should not be expected for all Qs, 4Q23 and 1H24 still have some expansion opportunity given the company's cost optimization and macro tailwinds providing a new base to build going forward." He also pointed out that SharkNinja products are available in 12% more locations for the 2023 holiday shopping season. Jeffries reiterated their Buy rating with a $67 price target.
SharkNinja analyst ratings and price targets are at MarketBeat. SharkNinja peers and competitor stocks can be found with the MarketBeat stock screener.
Daily ascending triangle breakout
The daily candlestick chart on SN is attempting an ascending triangle breakout. The ascending trendline started after bottoming at $25.84 on August 4, 2023. The flat-top upper horizontal trendline formed at $46.70 on October 2, 2023. It was rejected twice but made higher lows against each rejection. The daily market structure low (MSL) breakout triggered the $44.57 break. The daily relative strength index (RSI) is driving the breakout attempt as it rises towards the 70-band. Pullback support levels are at $41.12, $36.76, $33.08 and $29.42.
