Investors are on the edges of their seats, hoping that G&K Services (Nasdaq: GKSR) will top analyst expectations for the fifth consecutive quarter. The company will unveil its latest earnings on Tuesday, August 16. G&K Services provides apparel and facility services programs that enhance image and safety in the workplace.
What analysts say:
- Buy, sell, or hold?: Analysts think investors should stand pat on G&K Services with four of seven analysts rating it a hold. Analysts like G&K Services better than competitor UniFirst overall. One out of six analysts rate UniFirst a buy compared to three of seven for G&K Services. G&K Services' rating hasn't changed over the past three months.
- Revenue Forecasts: On average, analysts predict $207.8 million in revenue this quarter. That would represent a decline of 5.6% from the year-ago quarter.
- Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.47 per share. Estimates range from $0.46 to $0.49.
What our community says:
CAPS All Stars are solidly backing the stock, with 100% assigning it an "outperform" rating. The community at large concurs with the All Stars, with 90% giving it a rating of "outperform." Fools have embraced G&K Services, though the message boards have been quiet lately with only 13 posts in the past 30 days. G&K Services has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.
Management:
G&K Services' profit has risen year over year by an average of more than twofold over the past five quarters. A year-over-year revenue increase last quarter snaps a streak of two consecutive quarters of revenue declines. Revenue rose 5.7% in the third quarter and fell 1.1% in the second quarter and 3.7% in the first quarter.
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 |
Q3 |
Q2 |
Q1 |
Q4 |
|
Gross Margin |
31.5% |
31.3% |
32.3% |
32.3% |
|
Operating Margin |
7.6% |
8.1% |
9.0% |
9.8% |
|
Net Margin |
3.8% |
4.2% |
4.5% |
5.1% |
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