Dycom Industries (DY) Q3 Earnings Decline Expected: Does It Even Matter?

in EARNINGS/INVESTING IDEAS by

Dycom Industries, Inc. (NYSE:DY) is scheduled to report Q3 earnings results on November 26, 2019. The conference call broadcast with management is scheduled for 9:00am EST.

The company is expected to report earnings of $0.71/share on revenue of $846.3 million. The consensus earnings per share (EPS) of $0.71/share is based on a poll of 9 analysts and represents a decline of -27.6% over the same quarter last year when the company reported earnings of $0.98/share. The revenue forecast of $846.3 million based on a poll of 9 analysts implies a year-over-year (YoY) decline of -0.2%. Last year the company reported $848.2 million in revenue for the quarter.

Expected to report EPS decline of -$0.27/share for Q3, 2019
Metric Expected Prior Year YoY Change
Revenue $846.30 $848.24 -0.2%
EPS $0.71 $0.98 -27.6%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 7 tracked quarters, and missed expectations 3 quarters. What are your expectations from Dycom Industries for earnings this quarter? Let us know in the comments!

Analyst Expected vs Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.81 $1.09 34.6% Beat
Q1, 2020 $0.41 $0.53 29.3% Beat
Q4, 2019 $0.16 $0.10 -37.5% Missed
Q3, 2019 $0.92 $0.98 6.5% Beat
Q2, 2019 $1.06 $1.05 -0.9% Missed
Q1, 2019 $0.70 $0.65 -7.1% Missed
Q4, 2018 $0.10 $0.12 20.0% Beat

One question we always consider here at the Bankers’ Tribune is how important are earnings reports to Dycom Industries’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 27, 2019, the stock price reacted by increasing by 6.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-08-28 $41.19 $43.69 6.1% Increase
2019-05-21 $45.55 $54.40 19.4% Increase
2019-02-27 $62 $45.08 -27.3% Decline
2018-11-20 $70.94 $63.55 -10.4% Decline

Fundamentals And Technical Analysis

Dycom Industries is currently trading at $49.96/share, up 4.7% for the day. The company is trading at approximately 65.4% of its 52-week high of $76.35/share. The company’s stock price is up 14.4% since the last earnings report and down -0.8% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 46.39 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 25.1x and a forward P/E multiple of 19.3x. Dycom Industries’s current share price also implies a price-to-book (P/B) multiple of 1.8x. The following table summarizes some other key fundamental ratios:

Data as of November 25, 2019
Metric Value
Last Fiscal Period FY2020.Q2
Period End Date July 27, 2019
Stock Price (Current) $49.96
P/E Ratio 25.1x
P/E Ratio (Fwd) 19.3x
PEG Ratio 0.6
Total Debt to Capital (%) 40.4%
Levered Free Cash Flow -$190.8 million
Enterprise Value / EBITDA 8.2x

Source: Finbox

Company Profile: Dycom Industries, Inc.

Dycom Industries, Inc. is a small-cap stock with a market capitalization of $1.503 billion and a total enterprise value of $2.496 billion. The company operates in the Industrials sector and the Construction & Engineering industry.

Dycom Industries, Inc. provides specialty contracting services in the United States. The company offers various specialty contracting services, including program management, engineering, construction, maintenance, and installation services, such as placement and splicing of fiber, copper, and coaxial cables to telecommunications providers. It also provides tower construction, lines and antenna installation, and foundation and equipment pad construction for wireless carriers, as well as equipment installation and material fabrication, and site testing services; and installs and maintains customer premise equipment, such as digital video recorders, set-top boxes, and modems for cable television system operators.

In addition, the company offers construction and maintenance services for electric and gas utilities, and other customers; and underground facility locating services, such as locating telephone, cable television, power, water, sewer, and gas lines for various utility companies, including telecommunication providers.

Dycom Industries, Inc. was founded in 1969 and is based in Palm Beach Gardens, Florida.

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