SharkNinja (SN) reported a "solid" Q1 performance and raised its full-year outlook, though underlying trends were "mixed" and investor concerns over the sustainability of future upside weighed on the stock, Morgan Stanley said in a report Thursday.

The investment bank described the report as "glass-half-full," while arguing that parts of the company's outlook still appear "conservative" and its management deserves the "benefit of the doubt" on cost controls, according tot he report.

The quarterly earnings beat was driven largely by a "lower tax rate," while domestic sales growth missed expectations and gross margin upside was "narrower" than in recent quarters, the report said, adding that concerns over the company's ability to sustain its "beat-and-raise" trend weighed on the stock, though international growth trends remained encouraging.

The investment bank now forecasts fiscal 2026 revenue growth of 12.4%, up from their prior 11.4% estimate, and earnings per share of $6.12 versus an earlier forecast of $6.02. For fiscal 2027, it continues to project revenue growth of 9.4% while raising their EPS estimate to $6.74 from $6.68, according to the report.

Morgan Stanley maintained an equal-weight rating on SharkNinja and raised its price target to $128 from $127.

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