Evoqua Water Technologies (AQUA) Q4 Earnings Monitor: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Evoqua Water Technologies Corp. (NYSE:AQUA) is scheduled to report Q4 earnings results on November 21, 2019, at 10:00 am EST. The company is expected to report earnings of $0.21/share on revenue of $387.9 million. The consensus earnings per share (EPS) of $0.21/share is based on a poll of 9 analysts and represents a growth of 88.0% over the same quarter last year when the company reported earnings of $0.11/share.

The revenue forecast of $387.9 million based on a poll of 8 analysts implies a year-over-year (YoY) growth of 5.9%. Last year the company reported $366.3 million in revenue for the quarter. The company also provided an update on strategy in a recent investor presentation at the RBC Global Industrials Conference.

Expected to report EPS growth of $0.10/share for Q4, 2019
Metric Expected Prior Year YoY Change
Revenue $387.87 $366.33 5.9%
EPS $0.21 $0.11 88.0%

Earnings Call Trends

Historically, management has exceeded analyst expectations 1 out of the last 6 tracked quarters, and missed expectations 5 quarters. What are your expectations from Evoqua Water Technologies for earnings this quarter? Let us know in the comments!

Analyst Expected vs Reported EPS
Quarter Expected Reported Surprise Result
Q3, 2019 $0.15 $0.05 -64.1% Missed
Q2, 2019 $0.13 $0.16 24.4% Beat
Q4, 2018 $0.15 $0.11 -25.5% Missed
Q3, 2018 $0.20 $0.14 -28.2% Missed
Q2, 2018 $0.16 $0.16 -0.8% Missed
Q1, 2018 $0.05 -$0 NM Missed

One question we always consider here at the Bankers’ Tribune is how important are earnings reports to Evoqua Water Technologies’ stock price performance? It’s more important for some companies than for others.

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2019, the stock price reacted by increasing by 15.8%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-08-06 $12.90 $14.94 15.8% Increase
2019-05-10 $13.34 $12.74 -4.5% Decline
2019-02-05 $11.15 $12.01 7.7% Increase
2018-11-27 $8.54 $8.68 1.6% Increase

Fundamentals And Technical Analysis

Evoqua Water Technologies is currently trading at $17.70/share, down -3.4% for the day. The company is trading at its 52-week high. The company’s stock price is up around 18% since the last earnings call. The company’s 14 Day Relative Price Index (RSI) of 58.75 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

evoqua profitabilitySource: Investor Presentation, Page 5

The current share price implies a price-to-earnings (P/E) multiple of -149.8x and a forward P/E multiple of 38.6x. Evoqua Water Technologies’ current share price also implies a price-to-book (P/B) multiple of 5.6x. The following table summarizes some other key fundamental ratios:

Data as of November 20, 2019
Metric Value
Last Fiscal Period FY2019.Q3
Period End Date June 30, 2019
Stock Price (Current) $17.70
P/E Ratio -149.8x
P/E Ratio (Fwd) 38.6x
PEG Ratio 0.9
Total Debt to Capital (%) 32.5%
Levered Free Cash Flow $8.494 million
Enterprise Value / EBITDA 15.9x

Company Profile: Evoqua Water Technologies Corp.

Evoqua Water Technologies Corp. is a mid-cap stock with a market capitalization of $2.096 billion and a total enterprise value of $3.018 billion. The company operates in the Industrials sector and Machinery industry.

Evoqua Water Technologies Corp. provides a range of water and wastewater treatment systems and technologies, and mobile and emergency water supply solutions and services. It operates in three segments: Industrial, Municipal, and Products.

The Industrial segment offers capital systems and related recurring aftermarket services, parts, and consumables, as well as long-term and short-term service contracts, and emergency services for treating industrial process water, utility water, and wastewater. It serves customers in the hydrocarbon refineries, chemical processing, power, food and beverage, life sciences, health services, and microelectronics industries.

The Municipal segment offers engineered solutions and equipment, including ultrafiltration systems, advanced biological treatment, clarifiers, aerators, and odor and corrosion control services; equipment for new municipal plant builds and retrofit; and rehabilitation and aftermarket parts and services for installed bases. Its customers comprise wastewater and drinking water collection and distribution systems, and utility operators. The Products segment provides filtration and disinfection, electro deionization and electrochlorination, and separation technologies, as well as anodes. It serves original equipment manufacturers, distributors, and end-users in hotels, resorts, colleges, universities, waterparks, aquariums, and zoos, as well as the municipal, industrial, and commercial industries.

The company has operations in the United States, Canada, the United Kingdom, the Netherlands, Germany, Australia, China, and Singapore. Evoqua Water Technologies Corp. was incorporated in 2013 and is headquartered in Pittsburgh, Pennsylvania.

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