Fox Factory Shares Face Mounting Pressure Following Earnings Miss

Fox Factory US35138V1026

Shares of Fox Factory, the performance vehicle components manufacturer, are experiencing significant selling pressure in the wake of disappointing quarterly results. The market reaction has been fueled by analyst downgrades that cast doubt on the recovery timeline for a crucial high-margin business segment.

The catalyst for the current downturn was the company's report for the third quarter of 2025. Fox Factory posted adjusted earnings per share of $0.23, a figure that fell substantially short of the $0.54 consensus estimate among analysts. This significant earnings miss was accompanied by a net loss of $0.6 million for the period.

While the company did see a 5% year-over-year increase in net sales, reaching $376.4 million, this revenue growth was insufficient to offset clear profitability challenges. The results point to rising operational costs or pressure on profit margins beneath the top-line number.

Key High-Margin Segment Shows Weakness

A primary concern for investors and analysts alike was the performance of the Specialty Sports Group (SSG). Revenue within this segment declined by 11.2% compared to the same quarter last year. The weakness was attributed largely to soft sales in the Marucci brand and the bike category. This development is particularly troubling because the SSG division has historically generated Fox Factory's highest margins.

Market experts at Stifel now believe the recovery for this profitable core segment will take a full year longer than previously anticipated. This extended turnaround expectation is weighing heavily on the stock's valuation.

Analysts Revise Targets Amid Cautious Outlook

In response to the earnings report and segment data, prominent analysts have moved to adjust their price targets.

• Jefferies has sharply reduced its target price to $20.00 from $35.00, while maintaining a "Buy" rating on the stock. This new target still implies an upside potential of approximately 33% from the current share price, which is trading near its 52-week low of $14.93.
• Stifel has also lowered its target, cutting it to $25.00 from $35.00, citing the slower-than-expected recovery in the Specialty Sports Group. Stifel also continues to recommend the shares as a "Buy."

The broader macroeconomic environment presents additional headwinds for the recreational products business. Persistently high interest rates and waning consumer demand are creating ongoing challenges. Company management has acknowledged these factors, along with potential tariff impacts, as continuing concerns.

The substantial price target reductions paired with unchanged "Buy" recommendations reflect a market recalibration. Analysts are tempering their near-term growth expectations for Fox Factory, yet some maintain a belief in the company's long-term potential—contingent on its ability to successfully navigate the issues within its SSG segment.