Baird Lifts PT on RideNow Group Amid Struggling Business Model
· deals
Baird Lifts PT on RideNow Group (RDNW), Cites Robust Same-Store Sales
The news that Baird has lifted its price target on RideNow Group, citing robust same-store sales, is a reminder that Wall Street’s ability to spin wheels can sometimes distract from the underlying issues facing companies. On the surface, the 6.4% increase in Powersports revenue and 13.1% rise in same-store sales in Q1 2026 seem like positive developments.
However, scratch beneath the surface, and it becomes clear that RideNow Group’s business model is struggling to justify its own existence. The company’s reliance on Powersports sales – which make up a significant portion of its revenue – is a classic example of putting all one’s eggs in one basket. While the 16.3% increase in unit sales is impressive, it does little to offset the 8.3% decline in gross profit margin.
RideNow Group provides motor vehicle dealer and e-commerce platforms, but it operates in a crowded market that’s increasingly commoditized. As such, the company has been unable to shake off its reputation as a mid-tier player in the Powersports space. The rise of e-commerce and online sales has also made it clear that traditional brick-and-mortar dealerships will struggle to stay relevant.
Baird may have lifted its price target on RideNow Group, but investors would do well to examine the company’s underlying fundamentals more closely. In particular, they should consider the business model itself – rather than simply focusing on the numbers. As we’ve argued before, AI stocks are driving innovation in areas like autonomous vehicles and smart home technology.
Companies such as NVIDIA and Alphabet are leading this charge, while RideNow Group is still clinging to its old-school business model. This suggests that the company is struggling to keep pace with changing market conditions. Investors would do well to be cautious about getting caught up in the hype surrounding RideNow’s latest earnings report.
One factor that has had a significant impact on RideNow Group’s business is the Trump-era tariffs imposed on imported Powersports products. While some may argue that these tariffs will eventually lead to a shift towards domestic production, benefiting companies like RideNow, the reality is more complex. With e-commerce and online sales on the rise, consumers are increasingly looking for products made in the US or with a strong local presence.
The onshoring trend – driven by rising labor costs in China, increased scrutiny over intellectual property rights, and consumer demand for greater control and transparency in supply chains – has significant implications for RideNow Group. As a company that relies heavily on imported Powersports products, it’s struggling to adapt to this new reality.
Ultimately, investors considering putting their money into RideNow Group should think twice about the company’s ability to deliver returns. With a business model that’s struggling to keep up with changing market conditions and a reliance on commoditized Powersports sales, it’s hard to see how RideNow will be able to meet investor expectations. Despite Baird’s confidence in the stock price – with a target of $9 – investors should examine the fundamentals more closely before making a decision.
Reader Views
- SBSam B. · deal hunter
RideNow Group's reliance on Powersports sales is a ticking time bomb waiting to be detonated by market shifts. While same-store sales may be robust in Q1 2026, the company's declining gross profit margin should send alarm bells ringing. The commoditization of the Powersports market and the rise of e-commerce mean that traditional dealerships are struggling to stay relevant. Baird's price target hike is a Band-Aid on a bullet wound - investors need to look beyond the numbers and question whether RideNow Group's business model can adapt to changing market conditions.
- PRPat R. · frugal living writer
Baird's lifted price target on RideNow Group may give investors a false sense of security, but scratch beneath the surface and you'll find a company struggling to adapt to changing market conditions. Its reliance on Powersports sales is a recipe for disaster in an increasingly commoditized space where e-commerce reigns supreme. With traditional dealerships fighting to stay relevant, it's time to reassess whether RideNow Group can pivot its business model or risk becoming a relic of the past.
- TCThe Cart Desk · editorial
While the lift in Baird's price target on RideNow Group might give investors some temporary hope, it's a fleeting reprieve from the underlying structural issues that plague this company. The industry is rapidly shifting towards e-commerce and online sales, leaving traditional brick-and-mortar dealerships like RideNow struggling to adapt. As such, investors should be cautious not to get caught up in short-term gains, but instead focus on whether the company's business model can pivot quickly enough to stay afloat in an increasingly commoditized market.