Beacon Roofing Supply
The 10-second takeaway
For the quarter ended March 31 (Q2), Beacon Roofing Supply beat expectations on both revenue and earnings per share.
Compared to the prior-year quarter, both revenue and GAAP earnings per share grew. The profit was a surprise, as analysts had predicted a loss.
Margins improved across the board.
Beacon Roofing Supply reported revenue of $395.2 million. The 10 analysts polled by S&P Capital IQ expected revenue of $344.8 million on the same basis. GAAP-reported sales were 33% higher than the prior-year quarter's $296.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.07. The eight earnings estimates compiled by S&P Capital IQ predicted -$0.07 per share. GAAP EPS were $0.07 for Q2, compared to -$0.13 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 23.7%, 170 basis points better than the prior-year quarter. Operating margin was 2.5%, 480 basis points better than the prior-year quarter. Net margin was 0.8%, 290 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $579 million. On the bottom line, the average EPS estimate is $0.59.
Next year's average estimate for revenue is $2.03 billion. The average EPS estimate is $1.63.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 59 members rating the stock outperform and 22 members rating it underperform. Among 25 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 20 give Beacon Roofing Supply a green thumbs-up, and five give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Beacon Roofing Supply is outperform, with an average price target of $26.25.
Over the decades, small-cap stocks like Beacon Roofing Supply have provided market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: 2 Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.
- Add Beacon Roofing Supply to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.