What happened

Shares of Harley-Davidson (HOG 1.04%) were pulling back almost 7% in morning trading Thursday after a two-day run following its earnings report that saw the stock rise by more than 30%.

So what

After the motorcycle maker saw its stock lose nearly two-thirds of its value in just the last five months, as sales showed no sign of reversing their decline, investors might be taking some profits. The stock had been trading at lows it had not seen since the Great Recession of the last decade, so the surge in value let investors lock in gains.

Man riding a motorcycle under an overpass.

Image source: Harley-Davidson.

Now what

While Harley's earnings report did offer some hope for an eventual recovery, it was still thinly based. Sales were still down from the year-ago period, and although they were better than what analysts were anticipating, it just means Wall Street was overly pessimistic.

Still, the bike maker said U.S. sales had actually been up before the coronavirus pandemic struck, and it was the COVID-19 outbreak that caused sales to virtually vanish overnight. Management is now rewriting a roadmap for the future that promises to scale back the more grandiose ideas of its prior strategic plan.

Investors should still approach Harley-Davidson stock with caution, because the hole it's in is even deeper now. And details on where management intends to take the company are sparse until it offers an update with the second quarter.