Polaris Industries (NYSE:PII) held near current trading levels after RBC Capital left its Sector Perform rating unchanged and reiterated a $67.00 price target following the company’s fourth-quarter report. The stock was trading at $69.11 at the time of the report, roughly in line with InvestingPro’s Fair Value assessment that suggests the shares are fairly valued.
Polaris disclosed fourth-quarter revenue of $1,922 million, a 9.5% increase from the same period a year earlier and above both RBC and consensus forecasts. Management attributed the quarterly top-line improvement primarily to increased shipments and a favorable product mix within the Off-Road Vehicle - ORV - business, even as net pricing trends were weaker.
That quarterly gain contrasts with Polaris’s full-year revenue trajectory. InvestingPro data noted a 9.32% decline in revenue over the trailing twelve months, bringing twelve-month sales to $7.08 billion.
Retail demand in the company’s Powersports channel displayed pockets of strength. Excluding Youth products, Powersports retail sales rose 9% year-over-year, with ORV retail up 5% and the Snow segment showing a 40% increase. On the margin front, adjusted gross profit for the quarter reached $389.5 million, representing a 20.3% margin. Adjusted EBITDA was reported at $98.1 million, narrowly missing analyst estimates of $101.6 million. That quarterly EBITDA figure amounts to nearly one quarter of the company’s $430.5 million in EBITDA for the trailing twelve months.
Looking ahead to fiscal 2026, Polaris provided guidance that calls for revenue growth in the range of 1-3% year-over-year, an improvement in adjusted EBITDA margin of 80-120 basis points, and adjusted earnings per share between $1.50 and $1.60. The company clarified that this guidance does not include Indian Motorcycle, which management expects to sell in a majority stake transaction slated to close in Q1 2026.
The projected adjusted EPS marks a material shift from recent results: InvestingPro data shows Polaris recorded a diluted EPS of -$2.67 over the last twelve months, indicating the company was not profitable on a GAAP diluted basis during that period.
Polaris also flagged a $90 million tariff headwind for 2026. To counter sourcing and cost pressures, management has put transition plans in place aimed at reducing the share of cost of goods sourced from China to less than 5% by the end of 2027. The company has already taken steps to lower its China-related spend by $100 million.
Despite near-term headwinds, Polaris continues to return cash to shareholders through a long-standing dividend. The firm maintains a dividend yield of 3.88% and has sustained dividend payments for 39 consecutive years, according to InvestingPro.
The fourth-quarter earnings release included adjusted EPS of $0.08 per share, surpassing the consensus estimate of $0.05. Revenue for the quarter was reported as $1.92 billion, topping the expected $1.81 billion and representing a 9% year-over-year increase driven by higher shipments and improved mix in the off-road vehicle portfolio. Even with the earnings beat, Polaris shares experienced a modest decline following the announcement as investors weighed the beat against margin pressures and strategic transitions.
Analysis
Polaris’s most recent quarter underscores a classic volume-and-mix dynamic: stronger unit movement and favorable product mix in ORV and Snow offset weakness in net pricing. The company’s guidance for 2026 suggests management expects modest top-line growth and incremental margin recovery, but the plan sits alongside a material tariff exposure and a significant sourcing reconfiguration that will span multiple years.
Near-term profitability and margin performance will likely depend on how quickly cost reductions tied to China sourcing and other operational changes can offset tariff costs and pricing pressure. The pending majority stake sale of Indian Motorcycle is excluded from guidance, which introduces an element of uncertainty around reported results when that transaction closes.