BRP Inc. Common Subordinate Voting Shares (DOO)

FairStock Score: 62/100 — STEADY

Key Financials

Strengths

• Generates $726 million in annual free cash flow (17.6% yield on market cap)
• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• High return on equity of 79.4% demonstrating efficient capital deployment
• Revenue growth of 17.1% demonstrates strong top-line momentum
• Established organization with 17,000 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($25) with negative 125% margin of safety—limited downside protection
• High leverage at 4.39x debt-to-equity increases financial risk and interest expense burden
• Altman Z-Score of 1.1 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

BRP Inc. Common Subordinate Voting Shares is a small-cap consumer cyclical company valued at $4.1 billion. The business generates $8.4 billion in annual revenue with a 0.5% net margin and $726 million in free cash flow. From a quality standpoint, BRP shows solid Piotroski F-Score of 7/9 and distressed Altman Z-Score of 1.1 warrants caution. On valuation, the stock is reasonably priced at 16.5x earnings, with trades far above its Graham Number ($25) with no margin of safety. Growth dynamics show revenue growing at 17.1% and profit growth of 121.9%. The 1.1% dividend yield adds an income component for patient holders. Our composite FairStock Score of 62/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

BRP's 17% revenue growth trajectory could accelerate as it captures additional market share in the consumer cyclical sector. With $726 million in annual free cash flow (17.6% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Elevated leverage at 4.4x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer