What Happened?

Shares of off-Road and powersports vehicle corporation Polaris (NYSE: PII) jumped 10.9% in the morning session after the company reported second-quarter earnings and revenue that significantly surpassed analyst expectations. The off-road vehicle maker posted adjusted earnings per share of $0.40, a substantial beat compared to the consensus estimate. Additionally, revenue for the quarter came in at $1.85 billion, exceeding Wall Street's forecast of $1.74 billion. Despite the strong performance against estimates, total sales did fall by about 6% compared to the same period last year. The positive results also came alongside guidance for the next quarter that was better than analysts had anticipated. Investors appeared to focus on the better-than-expected profitability and outlook, even as the company withheld its full-year guidance, citing macroeconomic uncertainty.

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What Is The Market Telling Us

Polaris’s shares are quite volatile and have had 18 moves greater than 5% over the last year. But moves this big are rare even for Polaris and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 6 days ago when the stock gained 3% on the news that an analyst at Roth Capital raised the firm's price target on the stock, citing a less concerning trade tariff situation. Roth Capital increased its price target on Polaris to $41 from a previous $32, while it maintained a Neutral rating on the shares. The analyst noted that while the outlook for the boat and off-road vehicle markets appeared weak for 2025, the trade tariff environment had become less of a concern recently. This news came ahead of the company's scheduled second-quarter earnings release on July 29. Investors had been watching the potential impact of tariffs, which the company previously estimated could have a net impact of less than $225 million for the year after mitigation efforts.

Polaris is up 0.2% since the beginning of the year, but at $56.49 per share, it is still trading 35% below its 52-week high of $86.86 from August 2024. Investors who bought $1,000 worth of Polaris’s shares 5 years ago would now be looking at an investment worth $531.52.

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