Harley-Davidson (HOG): Buy, Sell, or Hold Post Q4 Earnings?

Harley-Davidson has gotten torched over the last six months - since August 2025, its stock price has dropped 29.8% to $20.25 per share. This was partly due to its softer quarterly results and might have investors contemplating their next move.

Is now the time to buy Harley-Davidson, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it’s free.

Why Do We Think Harley-Davidson Will Underperform?

Despite the more favorable entry price, we don't have much confidence in Harley-Davidson. Here are three reasons there are better opportunities than HOG and a stock we'd rather own.

1. Decline in Motorcycles Sold Points to Weak Demand

Revenue growth can be broken down into changes in price and volume (for companies like Harley-Davidson, our preferred volume metric is motorcycles sold). While both are important, the latter is the most critical to analyze because prices have a ceiling.

Harley-Davidson’s motorcycles sold came in at 13,500 in the latest quarter, and over the last two years, averaged 16.9% year-on-year declines. This performance was underwhelming and implies there may be increasing competition or market saturation. It also suggests Harley-Davidson might have to lower prices or invest in product improvements to grow, factors that can hinder near-term profitability.

2. Cash Flow Margin Set to Decline

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

Over the next year, analysts predict Harley-Davidson’s cash conversion will fall. Their consensus estimates imply its free cash flow margin of 9.3% for the last 12 months will decrease to 6.4%.

3. New Investments Fail to Bear Fruit as ROIC Declines

ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, Harley-Davidson’s ROIC has unfortunately decreased significantly. Paired with its already low returns, these declines suggest its profitable growth opportunities are few and far between.

Final Judgment

We see the value of companies helping consumers, but in the case of Harley-Davidson, we’re out. After the recent drawdown, the stock trades at 72.7× forward P/E (or $20.25 per share). This valuation tells us it’s a bit of a market darling with a lot of good news priced in - we think there are better stocks to buy right now. We’d suggest looking at the most dominant software business in the world.

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