BRP Inc. (DOOO): A Bull Case Theory

We came across a bullish thesis on BRP Inc. (DOOO) on Kroker Equity Research’s Substack. In this article, we will summarize the bulls’ thesis on DOOO. BRP Inc. (DOOO)’s share was trading at $40.55 as of 29^th May. DOOO’s trailing and forward P/E were 22.68 and 10.18 respectively according to Yahoo Finance.

BRP Inc. presents a compelling long-term investment case as a dominant player in the recreational powersports market with iconic brands like Ski-Doo, Sea-Doo, and Can-Am.

Despite facing steep earnings decline in FY2025 after record profits in FY2024, this downturn appears cyclical rather than structural. The company proactively scaled back production to realign inventory, a decision that impacted short-term results but positions BRP well for a healthier rebound. Its diversified portfolio across seasons and product lines, coupled with a robust parts and accessories business, supports recurring revenues and reinforces its competitive moat.

Strategic moves like exiting the underperforming boat segment and investing in electric powersports show management’s focus on long-term profitability and innovation, potentially capturing a first-mover advantage in electrification.

The company’s capital allocation is shareholder-friendly, maintaining dividends and buybacks even through the downturn, reflecting management’s confidence in its intrinsic value.

Currently trading at low valuation multiples, BRP appears significantly undervalued relative to its normalized earnings potential. A return to historical earnings levels could drive a meaningful re-rating. While the timing of recovery remains uncertain, the brand’s strong consumer resonance and the cyclical nature of the downturn suggest eventual mean reversion.

Key risks include continued weakness in consumer demand, elevated dealer inventories, and macroeconomic headwinds like interest rates and fuel prices. However, for patient investors, BRP offers the chance to buy a high-quality, market-leading business at a discounted price, with upside potential as the cycle turns and management’s strategic initiatives begin to pay off.

For a comprehensive analysis of another standout stock covered by the same author, we recommend reading our summary of their bullish thesis on Cisco Systems, Inc. (CSCO).

BRP Inc. (DOOO) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 10 hedge fund portfolios held DOOO at the end of the first quarter which was 8 in the previous quarter. While we acknowledge the potential of DOOO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. This article was originally published at Insider Monkey.