Harley-Davidson, Inc. (HOG): what the price requires

The current priced-in claim for Harley-Davidson, Inc. (HOG) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.

Generated: 2026-07-19 · Source: https://boothcheck.com/report/HOG

Headline

FieldValue
TickerHOG
CompanyHarley-Davidson, Inc.
Current price$25.38/sh
CompositionHDMC Motorcycles 59% / HDMC Parts and accessories 14% / HDMC Apparel 5% / HDMC Licensing 0% / HDMC Other 2% / LiveWire 1% / HDFS Interest income 15% / HDFS Other 4%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed9.2%
Operating margin today15.0%
Margin compression implied-5.8pp
Multiple paid4x operating income

The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage (computed at the 7% minimum rate; the CAPM rate 6.9% sits below it).

How unusual the bet is: within-range

ReferenceValue
vs own history-0.12σ
cohort percentile (of 212 peers)2
implied end-window share0%

Valuation X-Ray

The price is supported by earnings-power and relative-multiple value, while growth-DCF lands below the price. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.26x5expensive
Earnings1.22x3expensive
Relative0.60x3justifies
Growth2.22x5expensive

Families that justify the price: Earnings, Relative Families that call it expensive: Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.2%); the inversion above states its own rate.

Per-Model Detail (n=16)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$2.4410.40xyesFCF base $0.0B, growth -10% (input: historical growth), terminal g 0.5%, WACC 5.2%, 5yr projection
DCF Exit MultipleGrowth$22.341.14xyesExit EV/EBITDA: 5.6x / 7.6x / 9.6x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative$38.580.66xyesP/E 18x (static sector reference · 2026-04), scenarios: 15.2x / 18.0x / 20.8x (bear / base = reference held flat / bull), EV/EBITDA 12x
Simple DDMGrowth$48.320.53xyesDPS $0.78, g=7.5% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3%
Two-Stage DDMGrowth$5.824.36xyesStage 1: -15% for 5yr, Stage 2: 3.5% perpetual
Simple Excess ReturnAsset$22.491.13xyesBV/sh $27.66, ROE (TTM) 7.5%, ke 9.3%
Two-Stage Excess ReturnAsset$20.201.26xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$11.432.22xyesRev $4.3B, growth -11% (input: historical growth; tapered), Terminal P/S: 0.6x / 0.7x / 0.8x (bear / base = today's held flat / bull, cap 8x)
Growth-Adjusted P/ERelative——no—
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$58.490.43xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.60B × (1−40%) / WACC 5.2% → EPV (no growth)
Residual IncomeAsset$19.851.28xyesBV $27.66 + 5yr PV of (ROE (TTM) 7.5% − Kₑ 9.3%) × BV; BV grows 4.9%/yr
Graham NumberAsset$34.660.73xyes√(22.5 × EPS $1.93 × BVPS $27.66) — Graham's conservative floor
EV/EBITDA RelativeRelative$42.410.60xyesEBITDA $0.42B × sector EV/EBITDA 12.0x
FCF YieldEarnings$0.7135.74xyesFCF $43.9M / Kₑ 9.3% — zero-growth perpetuity (excluded from median)
SBC-Adj FCF YieldEarnings$0.012537.50xyesSBC-adj FCF $0.01B (FCF $0.04B − SBC $0.03B) capitalized at Kₑ (excluded from median)
Ben Graham FormulaEarnings$1.6215.66xyesEPS $1.93 × (8.5 + 2×-5.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$2.1611.75xyesBV $27.66 × (ROIC 0.4% / WACC 5.2%)
P/Sales SectorRelative$97.420.26xyesRevenue $4.32B × sector P/S 2.5x
PEG Fair ValueRelative——no—
Earnings YieldEarnings$20.861.22xyesEPS $1.93 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$326.7m
Net debt / NOPAT (after-tax)0.74x
Net debt / operating income (pre-tax)0.42x
Interest coverage26.5x
Share count CAGR (buyback)-7.9%
Burning cashno

Bullet Takeaways

Bull Case

The interesting thing in Harley's most recent quarter is the divergence between what it shipped and what actually sold. Shipments fell 3%, and reported operating income compressed sharply, but global retail motorcycle sales rose 8% and North America retail grew 14%, while dealer inventories ended the quarter 22% lower than a year ago. That combination is exactly what the early stage of a destocking-led recovery looks like: the company is deliberately shipping fewer bikes than dealers are selling, draining a bloated channel so that future shipments can match real demand. The income statement looks worst at the moment the underlying demand is turning up.

The captive lender is a quiet asset that the motorcycle headlines obscure. Harley-Davidson Financial Services financed 70.6% of new Harleys retailed by U.S. dealers, per the 10-K, which means the company captures the lending economics on most of its own sales and deepens the customer relationship at the point of purchase. For 2026 the company guides HDFS operating income to $45 to $60 million, a stable, profitable engine that runs somewhat independently of the motorcycle cycle and helps fund the turnaround.

The valuation gives the recovery a wide margin for error, and management is leaning into it. The stock trades around 4 times operating income, and the share count has shrunk nearly 8% over the past year as the company buys back stock aggressively. The new CEO introduced a strategic plan, Back to the Bricks, aimed at restoring volume growth, strengthening dealer profitability, and refocusing on the core brand. LiveWire is a free option on top: its revenue grew 87% year over year and its operating loss narrowed. The bull case is a cheap, cash-generative iconic brand at the bottom of an inventory cycle, with retail demand already inflecting and a buyback compounding the per-share claim.

Bear Case

The bear case turns on which story the price is actually buying, because Harley sells two narratives that point in opposite directions. One is the turnaround: destock, refocus, restore volume. The other is structural decline: an aging core rider base, a premium discretionary product, and a brand whose cultural pull with younger buyers is far from assured. The Back to the Bricks plan is a bet that the brand's problem is execution and inventory rather than demographics, and that is precisely the assumption most fragile in the price. If the issue is the size of the addressable rider population rather than the channel, a destock fixes a symptom, not the disease.

The quarter showed how quickly the economics deteriorate when volume softens. Net income fell to $24.8 million from $133.1 million a year earlier, and diluted EPS dropped to $0.22 from $1.07. The company's own 2026 guidance for the core motorcycle business ranges from a $40 million loss to a $10 million profit, an extraordinary band that admits the unit may not make money at all this year. A discretionary, big-ticket product is acutely exposed to the consumer cycle; the 10-K warns that weakened economic conditions lead to weaker demand for discretionary purchases, such as the Company's motorcycles, and that tighter credit can choke the financing most buyers rely on.

That credit dependence is the hidden lever. Because HDFS finances the majority of new Harleys, the company is exposed twice to a downturn: fewer bikes sold, and rising credit losses on the loans behind the ones already out. The filing notes that if lenders tighten lending standards or restrict their lending, customers may not be able to finance a purchase at all. LiveWire, meanwhile, remains a cash drain, with a guided 2026 operating loss of $70 to $80 million. The bear case is that the price assumes the turnaround narrative is the true one, when a low single-digit operating multiple and a guidance band straddling breakeven are the market's way of saying it is not yet convinced the core brand grows again.

Valuation

Harley is a sum of distinct businesses, so a single multiple is the wrong lens, but the headline number is striking either way: the stock trades around 4 times operating income, low enough that the price sits below what even a 5% annual decline in operating profit would warrant. In plain terms, the market is pricing the motorcycle business as if it is in secular decline, and asking the buyer to believe only that the decline is not steep. The recovery, the brand, and LiveWire are thrown in for free at this multiple.

The families of method split in a way that fits a cheap, out-of-favor cyclical. The earnings-power and peer-multiple lenses support the current price, while the growth lens reads it as expensive, which is simply another way of saying the market is not paying for growth here at all. That is the opposite of the growth premium that defines most consumer brands; Harley is priced as a value-and-asset name where the question is the floor, not the ceiling. The decomposition matters because the captive lender and the motorcycle maker are valued by completely different yardsticks, and blending them understates the more stable HDFS earnings.

Leverage looks heavier than it is because of that captive lender. Most of the company's debt funds the HDFS loan book rather than corporate operations, so the right read on solvency is interest coverage near 8.5 times and the lender's own asset quality, not a gross-debt-to-equity scare. One measurement caveat: the trailing operating income from the quarterly filings is far below the record-basis figure the headline multiple uses, a gap that reflects two different accounting windows and a weak recent stretch, so the 4-times figure should be treated as one solve under one set of assumptions. The valuation question is unusually binary for a brand this famous: at this multiple, the downside is largely priced, and the upside depends entirely on whether retail demand keeps inflecting and the core unit returns to sustained profit.

Catalysts

The Q1 2026 report, released in late April, was a mixed print that beat on revenue and missed on earnings. Revenue of about $1.1 billion topped expectations, but EPS of $0.22 fell short of the $0.23 forecast and collapsed from $1.07 a year earlier as net income dropped to $24.8 million. The operational read underneath was more constructive: shipments fell 3% to 37,295 units, but global retail sales rose 8% and North America retail grew 14%, and dealer inventories ended 22% below the prior year, evidence the channel is being cleaned out. LiveWire revenue rose 87% and its operating loss narrowed to $18 million.

The forward agenda is dominated by strategy and guidance. New CEO Artie Starrs introduced the Back to the Bricks plan to restore volume growth, strengthen dealer profitability, and refocus on the core brand. The company reaffirmed full-year 2026 guidance: core motorcycle operating results between a $40 million loss and a $10 million profit, HDFS operating income of $45 to $60 million, and a LiveWire operating loss of $70 to $80 million. The key things to watch are whether retail sales keep outpacing shipments as the destock completes, whether the new plan lifts the core unit back to profit, and the credit performance at HDFS as a read on the health of the customer base.

Peer Cohorts (Per Segment, With Filing Citations)

Harley-Davidson Motor Company (HDMC) (reported)

LiveWire (reported)

Harley-Davidson Financial Services (HDFS) (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Q1 2026 earnings release

View the full interactive HOG report on boothcheck