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Bull of the Day: SharkNinja (SN)

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SharkNinja, Inc. SN has been red-hot since being listed on the NYSE in August 2023. This Zacks Rank #1 (Strong Buy) is expected to grow sales and earnings by the double digits in 2024.

SharkNinja is a global product design and technology company. It operates two brands, Shark and Ninja. It has a history of bringing small home appliances to the market. You know its products and probably use them.

SharkNinja Has 4500+ patents and operates 5 innovation centers. Headquartered in Needham, Massachusetts, products are sold at key retailers, both online and off, and through distributors worldwide.

Third Beat in a Row in the First Quarter of 2024

On May 9, 2024, SharkNinja reported its first quarter 2024 results and beat the Zacks Consensus by $0.11. Earnings were $1.06 versus the Zacks Consensus of $0.95.

SharkNinja only went public in August 2023 after it was spun-off from Hong Kong’s JS Global Lifestyle. It still has connections to China.

In its guidance, it said it would have capital expenditures of $160 million to $180 million to support investments in new product launches, technology and investments in tooling to support the diversification of its sourcing outside of China.

It has only had three earnings reports in its young life. But it has now beat on earnings every quarter as a stand-alone company.

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Image Source: Zacks Investment Research

Net sales jumped 24.7% to $1.066 billion compared to $855.3 million from a year ago. It saw growth in each of its 4 categories.

Cleaning Appliances net sales rose 1.7% to $421.9 million, driven by the extractor and robotics sub-categories.

Cooking and Beverage appliances net sales jumped 28.4% to $329.6 million from $256.7 million last year boosted by growth in Europe, specifically in the United Kingdom. Growth was also supported by success of the outdoor grill and outdoor oven in both the US and European markets.

Food Preparation Appliances saw net sales grow 74% to $205 million, compared to $117.8 million a year ago. It was driven by strong sales of ice cream makers and compact blenders, specifically the portable blenders.

SharkNinja also has an β€œOther” category which rose 66.4% to $109.6 million, up from $65.9 million a year ago, primarily driven by continued strength of hair care products in the beauty category such as the Shark FlexStyle Air Style & Drying System which is a competitor to the Dyson, and the successful launch of the new FlexBreeze fans.

Adjusted gross margin rose to 50.8% from 48.7%. It continues to see supply chain tailwinds.

SharkNinja Raised Its Full Year Outlook

After a strong first quarter, the company has gotten more bullish for the rest of the year.

Adjusted net sales are expected to rise 12% to 14% year-over-year while earnings are now expected in the range of $3.66 and $3.82.

For earnings, that would be growth between 14% and 19%.

It’s not surprising, given the bullishness, that the analysts are also bullish. 4 estimates have been raised since the report, which has pushed the Zacks Consensus up to $3.82 from $3.54. This is at the high end of the company’s range.

That’s earnings growth of 18.6% as SharkNinja made $3.22 last year.

Analysts are also bullish about 2025, with 4 estimates higher since the report as well. The Zacks Consensus has jumped to $4.27 from $3.92 which is another earnings growth of 11.9%.

Shares Soar in 2024

SharkNinja was a hot stock out of the gate when it went public last summer. Shares have been hitting all-time highs throughout 2024 and are now up 90.5% since it went public while the S&P 500 is up just 15.9% .

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Image Source: Zacks Investment Research

Valuations aren’t stretched. It trades with a forward P/E of 19.5, which is still attractive for a growth stock. Because earnings are moving higher, it has an attractive PEG ratio of just 1.4.

For investors who are fans of its products, and who are looking for a consumer products company, SharkNinja should be on your short list.

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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.

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