Investors never know what to expect for Valmont Industries (NYSE: VMI), as it has wavered between topping and missing analysts estimates during the past fiscal year. The company will unveil its latest earnings on Friday. Valmont Industries is the producer of fabricated metal products and mechanized irrigation systems. It also produces metal and concrete pole and tower structures in its engineered support structures and utilities support structures businesses.

What analysts say:

  • Buy, sell, or hold? Analysts strongly back Valmont Industries, with five of eight rating it a buy and the remainder rating it a hold. Analysts like Valmont Industries better than competitor Simpson Manufacturing¬†overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $613.1 million in revenue this quarter. That would represent a rise of 27.3% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $1.46 per share. Estimates range from $1.36 to $1.69.

What our community says:
CAPS All Stars are solidly backing the stock with 96.3% assigning it an "outperform" rating. The community at large agrees with the All Stars with 95% granting it a rating of "outperform." Fools are gung-ho about Valmont Industries, though the message boards have been quiet lately with only 70 posts in the past 30 days. Despite the majority sentiment in favor of Valmont Industries, the stock has a middling CAPS rating of three out of five stars.

Management:
Valmont Industries' income has fallen year over year by an average of 6.6%. Revenue has now gone up for three straight quarters. The company's gross margin shrank by 3.4 percentage points in the last quarter. Revenue rose 54.6% while cost of sales rose 61.8% to $431.5 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

24%

26.3%

25.1%

26.7%

Operating Margin

8%

10.4%

8.9%

7.7%

Net Margin

4.5%

5.8%

4.9%

3.6%

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