What happened
Leading up to the company's second-quarter 2021 earnings presentation, shares of Rogers (ROG +6.11%), a global leader in specialty materials and components, were doing just fine, climbing about 5%. The climb, however, came to a screeching halt today, giving back the stock's gain during the week -- and then some. As of 10:32 a.m. EDT, shares of Rogers, which have fallen as much as 13.5%, are down 9.1%.
Besides the weak Q2 2021 earnings repot, investors are selling shares in response to the company's Q3 guidance and an analyst's downwardly revised price target on the stock.
Image source: Getty Images.
So what
Reporting $234.9 million on the top line for Q2 2021, Rogers met the guidance that it had provided during its Q1 2021 earnings presentation, yet investors are probably not wholly satisfied since it fell short of meeting analysts' estimate of $235.7 million. The greater concern, however, is likely found at the bottom of the income statement. Whereas analysts expected the company to report earnings per share of $1.89 and the company had guided for EPS of $1.58 to $1.73, it failed to achieve either, reporting $1.52.
Speaking to the earnings shortcoming on the Q2 2021 conference call, Bruce Hoechner, the company's president and CEO, said, "Rogers was not immune to the global supply chain challenges experienced by many manufacturing companies in the second quarter. These conditions were more significant than anticipated, and tempered our top line growth and resulted in margins and EPS that were below our guidance."
The company anticipates modest growth in the third quarter. In addition to forecasting revenue of $235 million to $245 million, Rogers expects to generate EPS of $1.50 to $1.65.
Along with the company's earnings report, Wall Street is likely motivating investors to leave their positions. Today, Canaccord Genuity cut its price target to $233 from $260, according to The Fly.
Now what
For investors seeking an alternative approach to investing in electric vehicles and other clean energy technologies, Rogers represents a viable option. The market's reaction today seems like a bit of an overreaction, and it presents investors interested in the stock with a chance to pick up the stock at a discount. Shares are currently trading hands at about 56.4 times trailing earnings, a discount to its five-year average multiple of 67.1.
