American Woodmark Q2 Earnings Preview: AMWD Up 27.9% Since Last Report

in EARNINGS/INVESTING IDEAS by

American Woodmark Corporation (NASDAQGS:AMWD) is scheduled to report Q2 earnings results on Tuesday, November 26, 2019. The live broadcast of the conference call can be found here.

The company is expected to report earnings of $1.76/share on revenue of $431.3 million. The consensus earnings per share (EPS) of $1.76/share is based on a poll of 4 analysts and represents a growth of 10.3% over the same quarter last year when the company reported earnings of $1.60/share.

The revenue forecast of $431.3 million based on a poll of 3 analysts implies a year-over-year (YoY) growth of 1.5%. Last year the company reported $424.9 million in revenue for the quarter.

Expected to report EPS growth of $0.16/share for Q2, 2019
Metric Expected Prior Year YoY Change
Revenue $431.30 $424.88 1.5%
EPS $1.76 $1.60 10.3%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, and missed expectations 4 quarters. What are your expectations from American Woodmark for earnings this quarter? Let us know in the comments!

Analyst Expected vs Reported EPS
Quarter Expected Reported Surprise Result
Q1, 2020 $1.97 $2.13 8.1% Beat
Q4, 2019 $1.88 $1.87 -0.5% Missed
Q3, 2019 $1.32 $1.40 6.1% Beat
Q2, 2019 $1.88 $1.60 -14.7% Missed
Q1, 2019 $1.96 $2.04 4.1% Beat
Q4, 2018 $1.20 $1.64 36.7% Beat
Q3, 2018 $0.95 $0.84 -12.0% Missed
Q2, 2018 $1.24 $1.21 -2.4% Missed

One question we always consider here at the Bankers’ Tribune is how important are earnings reports to American Woodmark’s 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 July 31, 2019, the stock price reacted by increasing by 8.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-08-27 $72.79 $78.91 8.4% Increase
2019-05-28 $85.39 $74.25 -13.0% Decline
2019-02-26 $86.78 $87.23 0.5% Increase
2018-11-29 $67.90 $66.89 -1.5% Decline

Fundamentals And Technical Analysis

American Woodmark is currently trading at $105.35/share, up 3.5% for the day. The company is trading at approximately 100.0% of its 52-week high of $102/share. The company’s stock price is up 33.5% since the last earnings report and up 3.6% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 65.31 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

The current share price implies a price-to-earnings (P/E) multiple of 20.1x and a forward P/E multiple of 13.7x. American Woodmark’s current share price also implies a price-to-book (P/B) multiple of 2.6x. The following table summarizes some other key fundamental ratios:

Data as of November 25, 2019
Metric Value
Last Fiscal Period FY2020.Q1
Period End Date July 31, 2019
Stock Price (Current) $105.35
P/E Ratio 20.1x
P/E Ratio (Fwd) 13.7x
PEG Ratio 1.2
Total Debt to Capital (%) 30.2%
Levered Free Cash Flow $173.3 million
Enterprise Value / EBITDA 10.2x

Source: Finbox

Company Profile: American Woodmark Corporation

American Woodmark Corporation is a small-cap stock with a market capitalization of $1.722 billion and a total enterprise value of $2.397 billion. The company operates in the Industrials sector and Building Products industry.

American Woodmark Corporation manufactures and distributes kitchen, bath, and home organization products for the remodeling and new home construction markets in the United States. The company offers made-to-order cabinetry in approximately 550 cabinet lines, which include 100 door designs in a range of painted or stained finishes, or engineered finishes under the Duraform name; and fronts made in various wood species, including maple, cherry, and oak, as well as engineered materials. It also provides value-based assembled cabinet products for stock kitchen and bath; ready-to-assemble cabinetry for home organization; and countertops and accessories. In addition, the company offers turnkey installation services to its direct builder customers through a network of eight service centers.

It sells its products under the American Woodmark, Timberlake, Shenandoah Cabinetry, Waypoint Living Spaces, Estate by RSI, Continental Cabinets, VillaBath by RSI, Stor-It-All, and Professional Cabinet Solutions brands, as well as private label brands, such as Hampton Bay, Glacier Bay, Style Selections, Allen + Roth, Home Decorators Collection, and Project Source.

The company markets its products, primarily through home centers, builders, and a network of independent dealers and distributors.

American Woodmark Corporation was founded in 1980 and is headquartered in Winchester, Virginia.

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