Last Update 23 Feb 26

Fair value Increased 3.16%

PATK: Future Returns Will Balance Powersports Aftermarket Expansion And Execution Risk

Patrick Industries' updated fair value estimate has increased from $133 to $137.20, reflecting analysts' higher price targets across multiple firms as they focus on slightly stronger revenue growth assumptions and a higher future P/E multiple, even as margin expectations remain broadly in line.

Analyst Commentary

Recent Street research on Patrick Industries centers on higher price targets and what that implies for execution, earnings resilience, and exposure to end markets like recreation and powersports.

Bullish Takeaways

Bullish analysts point to earnings resilience during macro headwinds as a key support for higher valuation multiples, viewing the business as having held up better than many recreation peers.
Growth potential in the aftermarket through RecPro is seen as an important lever for future revenue mix, which bullish analysts think could justify a richer P/E over time if execution stays consistent.
Expanding powersports exposure, now around 9% to 10% of revenue, is framed as a way to broaden the demand base beyond core RV and marine markets, which supporters view as constructive for long term growth optionality.
The series of price target raises across multiple firms is interpreted by bullish analysts as confirmation that the market may have previously undervalued the company’s earnings durability and diversification efforts.

Bearish Takeaways

More cautious analysts question how much of the earnings resilience is already reflected in the higher targets, raising the risk that investors might be paying up for performance that is now well recognized.
There is some concern that increased reliance on powersports and aftermarket contributions could bring execution risk if demand in those niches slows or if integration and scaling efforts fall short of expectations.
With targets stepping higher on similar margin expectations, bearish analysts flag the possibility that upside depends heavily on growth assumptions and sustained P/E support, which could be vulnerable if sentiment on the recreation sector cools.
Investors focused on risk may see the cluster of optimistic revisions as leaving less room for error on both earnings delivery and capital allocation decisions.

What's in the News

Completion of a share repurchase program totaling 4,257,720 shares, representing 12.3% of the company, for $195.99 million under the buyback initially announced on March 16, 2020 (Key Developments).
Update on the most recent buyback tranche from September 29, 2025, to December 31, 2025, during which the company repurchased 0 shares for $0, indicating no additional repurchases in that period (Key Developments).
Appointment of Matthew Filer, age 53, as Chief Financial Officer as part of the executive succession plan, succeeding Andrew Roeder, who plans to step down after the filing of the Form 10 K for the fiscal year ended December 31, 2025 (Key Developments).
Transition timeline outlined, with Mr. Roeder remaining with the company through the Form 10 K filing date to support continuity in finance leadership (Key Developments).
Background on the incoming CFO, who joined as Senior Vice President of Finance in November 2022, served as Interim CFO and Treasurer from May 2023 to March 2024, and was elected Chief Accounting Officer in May 2024 (Key Developments).

Valuation Changes

Fair Value: has risen slightly from $133.00 to $137.20.
Discount Rate: is essentially unchanged, moving from 8.79% to 8.82%.
Revenue Growth: has edged higher, shifting from 5.00% to 5.08%.
Net Profit Margin: is broadly stable, moving from 6.27% to 6.25%.
Future P/E: has risen meaningfully from 16.73x to 19.74x.

Product innovation, automation, and aftermarket growth drive higher margins, operational efficiency, and stable revenues across more diversified end markets.
Strategic acquisitions and vertical integration are strengthening market share, expanding content per unit, and enhancing long-term earnings potential.
Heavy reliance on cyclical markets, demographic changes, regulatory shifts, inflation, and acquisition risks threaten long-term growth and margin stability.

Catalysts

About Patrick Industries

Manufactures and distributes component products and materials for the recreational vehicle, marine, powersports, manufactured housing, and industrial markets in the United States, Mexico, China, and Canada.What are the underlying business or industry changes driving this perspective?

Rising consumer interest in outdoor recreation and mobile living, combined with lean dealer inventories and disciplined OEM production, could create a surge in demand for RVs and marine products as economic confidence and affordability improve (e.g., with eventual interest rate cuts), positively impacting future revenues and production volumes.
Ongoing innovation and product expansion-such as proprietary composite roofing systems, digital dashboards, integrated marine tower systems, and value-added content for utility vehicles-position Patrick to capture more content per unit, driving both organic revenue growth and margin expansion through higher-value engineered offerings.
Strategic investments in automation, advanced manufacturing processes, and full-solution models (e.g., greater integration of technology and materials across business units) are expected to yield operational efficiencies and scale benefits, supporting gross margin improvement and higher earnings over time.
Accelerated growth in the aftermarket segment, including direct-to-consumer (DTC) sales via RecPro and expanded SKUs, opens new and less cyclical revenue streams that diversify away from OEM production cycles, supporting topline and margin stability.
Patrick's active acquisition pipeline and vertical integration approach, enabled by strong balance sheet liquidity and disciplined capital allocation, create catalysts for market share gains and further diversification across end markets-providing ongoing opportunities to enhance revenue, net margins, and long-term earnings power.

Patrick Industries Earnings and Revenue Growth

Patrick Industries Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Patrick Industries's revenue will grow by 3.2% annually over the next 3 years.
Analysts assume that profit margins will increase from 3.3% today to 6.5% in 3 years time.
Analysts expect earnings to reach $273.7 million (and earnings per share of $7.49) by about September 2028, up from $126.1 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 16.2x on those 2028 earnings, down from 29.5x today. This future PE is lower than the current PE for the US Auto Components industry at 17.7x.
Analysts expect the number of shares outstanding to decline by 0.96% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.7%, as per the Simply Wall St company report.

Patrick Industries Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Overreliance on cyclical end markets such as RVs, marine, and manufactured housing exposes Patrick Industries to significant earnings volatility, as retail demand is highly sensitive to interest rates and macroeconomic conditions; prolonged high rates or economic slowdowns could materially reduce revenue and profitability.
Demographic shifts, particularly aging populations and declining formation of younger households, may lead to structurally lower long-term demand for RVs and manufactured housing, potentially limiting the company's organic revenue growth and content per unit expansion.
Tightening environmental regulations and increasing consumer preferences for sustainable products could drive up material and compliance costs, potentially compressing net margins if Patrick cannot innovate or adapt quickly enough to offset cost increases or fulfill new regulatory standards.
Persistent inflationary pressures, tariffs, and supply chain localization increase input costs (labor, raw materials, and imported components), and while some costs can be passed on, Patrick's ability to maintain operating margins could be challenged if inflation remains elevated or tariffs escalate.
Execution risks inherent in Patrick's acquisitive growth strategy-including integration challenges, overpayment for acquisitions, and potential underperformance of acquired entities-could dilute earnings and impair long-term profitability if not managed effectively.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $108.0 for Patrick Industries based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $115.0, and the most bearish reporting a price target of just $95.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $4.2 billion, earnings will come to $273.7 million, and it would be trading on a PE ratio of 16.2x, assuming you use a discount rate of 8.7%.
Given the current share price of $111.87, the analyst price target of $108.0 is 3.6% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

PATK: Future Returns Will Depend On Demand Stabilization And Inventory Normalization