BRP Inc. (DOO)

Price$57.17Cached quoteAs of 2026-09-28 03:07 UTC

AI: Fair-priced

Price checkThe shares look fairly priced because strong cash generation is offset by weak near-term earnings.

Using the Canadian cross-listing to match BRP’s Canadian-dollar accounts, the total stock-market value is roughly C$6.4 billion. Fiscal 2026 generated about C$915 million of free cash flow, meaning cash left after running and investing in the business, equal to about 14% of that market value. Reported profit was C$3.95 per share after allowing for potential share dilution, putting the shares near 22 times earnings. Management’s fiscal 2027 adjusted earnings guidance, which excludes selected unusual items, implies a still richer multiple. Those conflicting signals support a fair-price verdict.

Big pictureSales are recovering, but profits remain far below the boom years and the business is cyclical.

Revenue rose 6.8% to C$8.44 billion in fiscal 2026 after a 20.7% drop the year before, but operating income fell to C$399 million from C$1.41 billion in fiscal 2024. Free cash flow also swung sharply: about C$1.11 billion in fiscal 2024, C$292 million in fiscal 2025, and C$915 million in fiscal 2026. That volatility shows why one strong cash year should not be treated as permanent. First-quarter fiscal 2027 revenue jumped 29.5%, but North American powersports retail sales still fell 7%.

Business strengthBRP has strong brands and improving debt, but the balance sheet still carries meaningful risk.

Net debt, meaning debt minus cash, fell from about C$2.95 billion to C$2.25 billion in fiscal 2026, while total debt dropped by about C$451 million. Still, net debt was roughly 2.8 times fiscal 2026 EBITDA, a measure of operating profit before interest, taxes, depreciation and amortization. Share count is about 15% below fiscal 2021, which is positive for owners, although it edged higher in fiscal 2026. Dividends used only C$63 million, leaving most cash available for debt reduction, reinvestment, or future repurchases.

What could change the storyTariff relief or durable profit recovery could unlock upside, while weak demand would expose the valuation.

The strongest bull case is that first-quarter fiscal 2027 strength becomes durable: revenue rose 29.5%, adjusted operating profit before interest, taxes, depreciation and amortization rose 66.5%, and BRP gained off-road market share. The bear case is that U.S. tariffs and softer retail demand prevent that recovery; management estimated more than C$500 million of tariff cost before mitigation and now guides to only C$3.00–C$3.50 of adjusted earnings per share. At a 15-times earnings yardstick, the current valuation needs roughly C$5.8 per share of sustainable earnings, well above that guidance midpoint.

AI: News

Tariff shock hit guidanceNew U.S. tariffs forced BRP to pull guidance and sharply increased expected costs.

On April 14, 2026, BRP suspended fiscal 2027 guidance after U.S. rules imposed a 25% tariff on the full value of imported snowmobiles and most off-road vehicles. The company estimated more than C$500 million of incremental cost for the rest of the year before mitigation. Bloomberg reported the shares fell about one-third after the announcement. The mechanism is direct: higher landed costs can cut margins, force price increases, or reduce demand.

First-quarter reboundBRP beat expectations, restored guidance, and showed strong shipments despite weaker retail sales.

On May 28, 2026, BRP reported C$2.39 billion of revenue, up 29.5%, while operating profit before interest, taxes, depreciation and amortization rose 66.5% on an adjusted basis to C$334 million. Adjusted diluted earnings were C$1.83 per share, above reported analyst expectations, and management set fiscal 2027 adjusted earnings guidance at C$3.00–C$3.50. North American powersports retail sales still fell 7%. Yahoo Finance reported an 8.6% premarket share gain; that reaction is consistent with better-than-feared results, though premarket moves can change.

U.S. financing launchBRP launched branded U.S. financing to help dealers close more sales and improve customer access.

Announced August 18, 2026, BRP Financial Services went live August 24 through Octane, which handles credit decisions, funding, and loan servicing. The program gives U.S. dealers a BRP-branded financing process and could improve sales conversion. Because Octane supplies the lending infrastructure, BRP may capture sales benefits without funding the loans itself. The stock gained 7.5% on August 18, but several product announcements and analyst actions occurred around the same time, so the move cannot be confidently attributed to financing alone.

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Financial statements

	2026	2025	2024	2023	2022	2021	2020	2019	2018
Revenue	$8.44B	$7.90B	$9.96B	$10.03B	$7.65B	$5.95B	$6.05B	$5.24B	$4.45B
Gross profit	$1.89B	$1.78B	$2.63B	$2.50B	$2.13B	$1.47B	$1.45B	$1.25B	$1.05B
Gross margin	22.35%	22.50%	26.44%	24.91%	27.88%	24.73%	24.02%	23.90%	23.47%
Research & development	$434.7M	$391.1M	$401.9M	$367.7M	$289.8M	$242.3M	$238.4M	$221.7M	$198.6M
Operating expenses	$1.49B	$1.22B	$1.23B	$1.13B	$945.2M	$1.01B	$849.7M	$780.8M	$667.4M
Operating income	$399.4M	$554.3M	$1.41B	$1.37B	$1.19B	$465.6M	$604.3M	$472.6M	$377.7M
Operating margin	4.73%	7.01%	14.12%	13.63%	15.52%	7.82%	9.98%	9.01%	8.48%
EBITDA	$792.9M	$926.7M	$1.75B	$1.64B	$1.42B	$690.6M	$806.1M	$649.9M	$526.9M
EBITDA margin	9.39%	11.73%	17.55%	16.35%	18.62%	11.60%	13.32%	12.39%	11.83%
Net income	$289.3M	−$213.0M	$744.5M	$865.4M	$794.6M	$362.9M	$370.6M	$227.3M	$239.1M
Net profit margin	3.43%	−2.70%	7.47%	8.63%	10.39%	6.10%	6.12%	4.33%	5.37%
Basic EPSper basic share	CA$3.99	-CA$2.89	CA$9.63	CA$10.88	CA$9.57	CA$4.15	CA$4.00	CA$2.31	CA$2.23
Diluted EPSper diluted share	CA$3.95	-CA$2.86	CA$9.47	CA$10.67	CA$9.31	CA$4.10	CA$3.96	CA$2.28	CA$2.21