SharkNinja (SN:NYSE) $75.16

Gain to date: 53.5%

We highlighted the attractions of SharkNinja (SN:NYSE) at $49 last December and shares in the cleaning-to-cooking appliances designer have soared 53.5% higher since. Risk-averse readers may be tempted to take profits off the table, but Shares believes this would be a mistake given the massive market share opportunity ahead for the Shark and Ninja brands, which are achieving global appeal driven by investment in innovation and an exciting product line-up that is clearly delighting consumers.

WHAT HAS HAPPENED SINCE WE SAID TO BUY?

SharkNinja, which designs household appliances ranging from smart vacuum cleaners and air fryers to hairdryers, followed up strong full-year results (15 February) with forecast-beating results for the first quarter to March 2024 (9 May).

Sales surged 27.6% higher year-on-year to the best part of $1.07 billion, breezing past the $905 million Wall Street was looking for. Gross margins hit 50.8% for the first time too, thanks to supply chain tailwinds and cost optimisation efforts.

SharkNinja also raised its full-year sales growth guidance from a 7% to 9% range to between 12% and 14%, whilst upgrading its adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) estimate to $840 million to $870 million, above the previously communicated $800 million to $830 million range.

WHAT SHOULD INVESTORS DO NOW?

Hold onto the stock for dear life. SharkNinja is at the foothills of its expansion into new categories and geographic regions and has even persuaded David Beckham to sign on as a Ninja brand ambassador.

Jefferies shares our bullish stance, with a ‘buy’ rating and $100 price target implying 33% upside from current levels. The broker stresses that SharkNinja’s industry-leading margins are both predictable and stable, positioning the company as a consistent grower.

‘This reliability supports further multiple expansion and a higher valuation, in our view.’ 

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