SharkNinja (SN:NYSE)   $89.10

Gain to date: 82%

Market cap: £1.5 billion

We flagged SharkNinja’s (SN:NYSE) attractions at $49 in December 2023 and the cleaning and cooking appliance maker’s stock has since rocketed on the delivery of strong growth and upgrades. The share price recently peaked at $111 before a third quarter results-induced correction, though our ‘buy’ call remains 82% in the money.

Risk-averse readers may be tempted to take profits, but we remain excited by the massive global market share opportunity ahead for the Shark and Ninja brands and note the company continues to deliver strong double-digit growth across its product portfolio.

WHAT HAS HAPPENED SINCE WE SAID BUY?

Results (31 October) for the third quarter ended 30 September were better than expected and SharkNinja bumped up full year guidance, but the market overreacted to higher expenses designed to drive long-term sustainable growth and concerns over the Christmas quarter outlook.

Third quarter sales of $1.43 billion were up 35% year-on-year, driven by international expansion and innovation-driven market share gains, while the air fryer, vacuum cleaner and hair dryer designer’s adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) jumped 26% year-on-year to $262.4 million and management now expects full year 2024 sales to grow between 27% and 28%, up from previous guidance of 22% to 24%. Adjusted EBITDA is expected to be in the $925 million to $945 million range, implying heady year-on-year growth of 29% to 31%.

WHAT SHOULD INVESTORS DO NOW?

Buy on weakness, since SharkNinja continues to ‘exhibit broad product strength driven by its innovation flywheel within new and existing categories’ according to Jefferies, which applauded management for ‘reinvesting in a business experiencing robust growth with a growing international opportunity’. As for SharkNinja’s CEO Mark Barrocas, he remains ‘confident in our ability to deliver sustainable long-term profitable growth as we capture increasing share in our large and growing addressable market.’ 

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