What happened

Week to date, shares of Harley-Davidson (HOG 0.56%) were up 19.5% as of 11:36 a.m. ET on Friday. The gain follows better-than-expected third-quarter earnings on Wednesday, highlighted by solid growth in revenue. 

Lower growth this year compared to 2021 has weighed on the stock lately, but that's not much to complain about. The iconic motorcycle brand has maintained steady revenue and profits in a challenging economic environment, which has pushed the stock up 14% year to date.  

So what

Harley is executing against its Hardwire strategy to build better motorcycles and expand its growth opportunities with new products. Core revenue increased by 24% year over year, with shipments up 19%. However, the acceleration in growth was mostly due to a recovery in production after a suspension in the second quarter.

That doesn't take away from solid performance in cost controls. Earnings per share were up an impressive 70% year over year. While inflation continues to be an obstacle, the company experienced lower logistics rates and an easing in raw material costs during the quarter, which contributed to strong growth on the bottom line. 

Now what

Inventory remains at historically low levels at retail, but management noted that inventory is starting to flow to dealers again following the production suspension in May. This is good news for near-term sales, as dealers are seeing healthy demand for new motorcycles.

Management reiterated full-year guidance for revenue to increase by 5% to 10% year over year, with operating profit down 20% to 25% over last year. Profits have been pressured by higher allowance for credit losses and interest expense from rising interest rates, which is a headwind to watch in the near term.

Overall, this value stock has held up well for investors in the bear market. Harley's brand and long-term growth opportunities underscore a potentially undervalued business, with the stock trading at less than 10 times this year's expected earnings.