Polaris: The weird flex car

Hello, You know that car that kinda looks like a batmobile that dudes with gucci belts drive when you're out at the club? Or a random bar .... in downtown Chicago ... ​ https://preview.redd.it/6ojawjfk06d81.png?width=1386&format=png&auto=webp&s=da2ba5eae1ca5eabe2a0250f9aa92e897cd71154 This is it. Anyway the company Polaris makes them ticker $PII (pii). I think they will tank in earnings this week (1/25 Pre-market) and let me tell you why. Number 1: people who drive them have no swag ​ https://preview.redd.it/kom47vnm06d81.png?width=1384&format=png&auto=webp&s=fe00a30df5ae14b4e3df86b1d006a80d47c7043d Number 2: Last Earnings call ​ https://preview.redd.it/csaoibmr06d81.png?width=1374&format=png&auto=webp&s=772b95b2ed4b9203ae121b559445edddc46ba539 Bitched about supply chain & commodity prices & labor shortages last earnings call and I don’t think things have improved since. Inflation at an all time high Biden is still floundering trying to figure out how to deal with supply chain. So, I don’t expect positive guidance on the Jan 25th, given that no one knows wtf the FOMC is going to do on the Jan 26. Number 3: fomc uncertainty makes guidance hard (PII earnings on 25th, and fomc 2pm 26th) ​ Press release from US Treasury released today (Jan 21) https://home.treasury.gov/news/press-releases/jy0565 Of course, given the scale, novelty, and uncertain path of the pandemic, the recovery also comes with challenges. Labor supply has yet to recover to pre-pandemic levels, as health, childcare, and other related challenges remain. Inflation is a valid policy concern, and it has risen to levels not seen since the 1980s. It far exceeds any increase that would normally result from a labor market with 3.9 percent unemployment. I believe that the pronounced shift in spending away from services and toward goods contributed to outsized price increases. Additionally, the associated supply chain bottlenecks are boosting costs and holding back production of automobiles and other key products. This seems to be relevant for the current conditions still being trash in relation to PII last earnings call Number 4: balance sheet https://preview.redd.it/zz7e6skp06d81.png?width=1316&format=png&auto=webp&s=a381105f47695da13a525ec909295f7b89a00ebb ​ 3%, increase in operating expenses which is pretty significant for PII. $7M is increase in expenses but their income from finance went down another $7M lol income dropped 35% even though NA sales were down 24%. So they not looking too good over there. This is as Sept 30th btw, if NFLX isn’t hitting their subscriber goals I’m betting PII won’t meet their weird car flex goals. Conclusion So yah in this shaky market before FOMC I think a luxury good company that sells items meant for Gucci Mane, that is struggling to deal with macro factors which have gotten worse is going to tank. Steel/aluminum are up since last earnings call and think it's likely that they may field a question about this. Also, after guiding for revenue of 2.111B and EPS of $2.53 for Q4 these numbers seem pretty hard to achieve given headwinds-- so hard to see surprise in guidance to the upside. Lastly, each of the last 3 earnings they have tanked, the chart looks bearish, barely any bullish OI in the front month. Atleast until FOMC guidance will be hard and markets seem to be sell first, in general before FOMC seems like a bad time to announce earnings. ​ minimal bullish OI for Feb and down the chain , P/C ratio 1.23 ​ PII top of implied move list - if take options into account this is a implied move down ​ Here’s my bet ​ https://preview.redd.it/2q9yvfis06d81.png?width=2658&format=png&auto=webp&s=657d5618a83fe040beb60bf5b38702c448f5b2a1 It’s not a big bet and it reflects my level of conviction. I may increase the bet depending on how markets open. So don’t at me if it doesn’t work out. They might try to counter a bad report, with a buyback expansion or dividend increase. ​ Edit: They also make RZRs, Indian Motorcycles, and all kinds of other shit

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Polaris: The weird flex car

bearish

Hello,

You know that car that kinda looks like a batmobile that dudes with gucci belts drive when you're out at the club? Or a random bar .... in downtown Chicago ...



This is it. Anyway the company Polaris makes them ticker $PII (pii). I think they will tank in earnings this week (1/25 Pre-market) and let me tell you why.

Number 1: people who drive them have no swag



Number 2: Last Earnings call



Bitched about supply chain & commodity prices & labor shortages last earnings call and I don't think things have improved since. Inflation at an all time high Biden is still floundering trying to figure out how to deal with supply chain. So, I don't expect positive guidance on the Jan 25th, given that no one knows wtf the FOMC is going to do on the Jan 26.

Number 3: fomc uncertainty makes guidance hard (PII earnings on 25th, and fomc 2pm 26th)

Press release from US Treasury released today (Jan 21)

https://home.treasury.gov/news/press-releases/jy0565

Of course, given the scale, novelty, and uncertain path of the pandemic, the recovery also comes with challenges. Labor supply has yet to recover to pre-pandemic levels, as health, childcare, and other related challenges remain. Inflation is a valid policy concern, and it has risen to levels not seen since the 1980s. It far exceeds any increase that would normally result from a labor market with 3.9 percent unemployment. I believe that the pronounced shift in spending away from services and toward goods contributed to outsized price increases. Additionally, the associated supply chain bottlenecks are boosting costs and holding back production of automobiles and other key products.

This seems to be relevant for the current conditions still being trash in relation to PII last earnings call

Number 4: balance sheet



3%, increase in operating expenses which is pretty significant for PII. $7M is increase in expenses but their income from finance went down another $7M lol income dropped 35% even though NA sales were down 24%. So they not looking too good over there. This is as Sept 30th btw, if NFLX isn't hitting their subscriber goals I'm betting PII won't meet their weird car flex goals.

Conclusion

So yah in this shaky market before FOMC I think a luxury good company that sells items meant for Gucci Mane, that is struggling to deal with macro factors which have gotten worse is going to tank. Steel/aluminum are up since last earnings call and think it's likely that they may field a question about this. Also, after guiding for revenue of 2.111B and EPS of $2.53 for Q4 these numbers seem pretty hard to achieve given headwinds-- so hard to see surprise in guidance to the upside. Lastly, each of the last 3 earnings they have tanked, the chart looks bearish, barely any bullish OI in the front month. Atleast until FOMC guidance will be hard and markets seem to be sell first, in general before FOMC seems like a bad time to announce earnings.

minimal bullish OI for Feb and down the chain , P/C ratio 1.23

PII top of implied move list - if take options into account this is a implied move down

Here's my bet



It's not a big bet and it reflects my level of conviction. I may increase the bet depending on how markets open. So don't at me if it doesn't work out. They might try to counter a bad report, with a buyback expansion or dividend increase.

Edit: They also make RZRs, Indian Motorcycles, and all kinds of other shit

read-time
3 min
100.00
Target Price
7/ 10
Confidence
1-2 Months
Timeframe
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Earnings Release
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News
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SEC
Filing
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Sentiment
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