Tough year for tandem30 Mar '22
Tandem looks in a decent position long term especially as it has good diversification across its portfolio.
Bicycle market is currently terrible and super tough to navigate.
Lead-times are very long still and manufacturers like tandem have had to place big orders to secure slots, this would have been 12 - 18 months ago.
These orders are only just filtering through but there is a tidal wave of orders to follow which is going to concertina in towards mid to end of this year, now couple this with the sudden drop in demand of the past three months, rising energy and petrol and general headwinds the bicycle industry is heading into a perfect storm.
The good news is of course Tandem is cash rich and can ride out the storm and maybe find opportunity out of adversity as leveraged rival brands fall over.
E-scooters are not going to save them, this market has collapsed. Zyro-Fisher one of the largest / best cycling distributors have just discontinued all their e-scooter ranges due to poor sales and concerns over liability issues. Selling scooters that are banned on the road that then cause injury or death by the user, well its not hard to see how the manufacturer / retailer get sucked into this.Tandem will catch a cold on e-scooters that is for sure.
Tanden is a good long term hold but is going to be in the eye of a storm this year and a lot this year is going to depend on how they can manage their order book and stock as it arrives into a brutal marketplace.
If they can manage that, sit back a touch, sit on cash and have the balls to make a positive out of a negative they could play a smart game .
I'm holding but think there could be further to fall even if the shares look stonking value.