Moody’s Ratings affirmed the debt ratings on SRAM as the Chicago-based bike parts manufacturer returned to revenue growth in 2025 after seeing sharp declines in earnings and sales over the prior two years.
Moody’s said in its report, “Unusually high pandemic-driven demand for bikes and related components has returned to more normal levels, and as a result, the company reported meaningful revenue and EBITDA declines in fiscal 2023 and 2024. SRAM’s revenue has turned to growth in 2025 and remains above pre-pandemic levels, supported by good aftermarket performance as industry inventories are normalizing following an extended correction period. Still, the bicycle components industry is facing ongoing demand headwinds due to pressures on consumer discretionary spending with cumulative high inflation and high economic uncertainty.”
The rating agency said SRAM’s ratings, including its B1 corporate family rating with a stable outlook, remain unchanged.
Moody’s said SRAM’s moderate debt/EBITDA leverage of 3.3x in the last 12 months (LTM) ending in the third quarter provides some cushion to absorb a “modest pullback” in demand over the next 12 to 18 months. The ratings also reflect SRAM’s volatility in credit metrics and its history of aggressive financial strategies, including large debt-funded dividends.
Moody’s further said in its analysis, “SRAM benefits from its strong market position within the niche premium bicycle component segment, supported by its solid product portfolio and strong brand recognition among bike enthusiasts and dealers. SRAM is also well-positioned to benefit from increasing trends in bicycling related to improving health and wellness trends, bolstered by consumer behavior during the global pandemic. SRAM also has good geographic diversification, with about half of its revenue generated in Europe and the other half in the US. The company’s very good liquidity is also supported by good operating cash flow generation, its healthy cash balance and access to an undrawn $100 million revolver facility as of 3Q-2025.
“The stable outlook reflects SRAM’s very good liquidity, supported by its healthy cash balance and its currently moderate leverage that provides the company with financial flexibility to navigate the current challenging operating environment. The stable outlook also reflects our expectation that the company will remain narrowly concentrated in the bicycle equipment industry and remain exposed to potential volatility in sales and earnings.”
Image courtesy SRAM
