Fox Factory (FOXF), a leading manufacturer of suspension systems, saw its stock plummet 24.86% in pre-market trading on Friday. The sharp decline follows the company's release of disappointing third-quarter earnings and a weaker-than-expected outlook, raising concerns about its near-term growth prospects.

The company reported Q3 adjusted earnings per share of $0.23, significantly missing the analyst consensus estimate of $0.55. Quarterly sales of $376.36 million, while up 4.8% year-over-year, fell short of the expected $383.30 million. More alarmingly, Fox Factory posted a net loss of $662,000, or $0.02 per share, compared to a net income in the same period last year. The earnings miss was attributed to higher tariff costs and continued investments pressuring profitability.

Adding to investor concerns, Fox Factory provided a cautious outlook for the fourth quarter and full-year 2025. The company expects Q4 net sales between $340 million and $370 million, with adjusted EPS ranging from $0.05 to $0.25. For the full year, Fox Factory anticipates net sales of $1.445 billion to $1.475 billion and adjusted EPS between $0.92 and $1.12. These projections suggest ongoing challenges in the company's operating environment, likely contributing to the sharp sell-off in its stock. As Fox Factory grapples with these headwinds, investors appear to be reassessing the company's valuation and growth potential in the competitive auto parts industry.