Chart Industries Q3 Earnings: Can NasdaqGS:GTLS Hit Its $0.61 EPS Target?

in EARNINGS/INVESTING IDEAS by

Chart Industries, Inc. (NasdaqGS:GTLS) is scheduled to report Q3 earnings results before markets open for trading on October 22, 2020.

The company is expected to report earnings of $0.61/share on revenue of $302 million. The consensus earnings per share (EPS) of $0.61/share is based on a poll of 16 analysts and represents a decline in eps of −20.5% over the same quarter last year, when the company reported earnings of $0.77/share.

The revenue forecast of $302 million based on a poll of 14 analysts implies a year-over-year (YoY) decline in revenue of −15.6%. Last year the company reported $357.8 million in revenue for the quarter.

Expected to report EPS contraction of −20.5% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $302.04 $357.80 −15.6%
EPS $0.61 $0.77 −20.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters.

What are your expectations from Chart Industries, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.41 $0.63 52.7% Beat
Q1, 2020 $0.51 $0.57 12.2% Beat
Q4, 2019 $0.92 $0.72 −21.4% Missed
Q3, 2019 $0.76 $0.77 1.1% Beat
Q2, 2019 $0.60 $0.68 13.3% Beat
Q1, 2019 $0.43 $0.39 −8.7% Missed
Q4, 2018 $0.52 $0.61 18.2% Beat
Q3, 2018 $0.50 $0.76 52.4% Beat

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, 2020, the stock price reacted by increasing 19.3%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 23, 2020 $55.64 $66.40 19.3% Increase
April 23, 2020 $27.80 $32.41 16.6% Increase
February 13, 2020 $65.66 $73.56 12.0% Increase
October 17, 2019 $58.81 $58.09 −1.2% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.83, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.83 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

Chart Industries, Inc. is currently trading at $83.10/share, down −1.7% for the day. The company is trading at approximately 96.7% of its 52-week high of $85.89/share. The company’s stock price is up 25.2% since the last earnings report and up 10.3% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 69.90 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:GTLS Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 50.10 and a forward P/E multiple of 33.69.

Chart Industries, Inc.’s current share price also implies a price-to-book (P/B) multiple of 2.41. The following table summarizes some other key fundamental ratios:

Data as of October 20, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $83.10
P/E Ratio 50.1x
P/E Ratio (Fwd) 33.7x
PEG Ratio −1.5
Total Debt / Total Capital 20.2%
Levered Free Cash Flow $172.5 million
EV / EBITDA 16.3x

Finbox

Chart Industries, Inc. is a mid-cap stock with a market capitalization of $2.991 billion and a total enterprise value of $3.653 billion. The company operates in the Industrials sector and the Machinery industry.

Chart Industries, Inc. manufactures and sells engineered equipment for the energy and industrial gas industries worldwide. The company operates through four segments: Distribution & Storage Eastern Hemisphere, Distribution & Storage Western Hemisphere, Energy & Chemicals Cryogenics, and E&C FinFans. It provides brazed aluminum, Core-in-Kettle, air cooled, and shell and tube heat exchangers; cold boxes, high pressure reactors, and process systems; and axial cooling fans for power, heating, ventilation, air conditioning, and refining end user applications. The company also offers bulk and packaged gas cryogenic solutions for the storage, distribution, vaporization, and application of industrial gases; and cryogenic components, including vacuum insulated pipes, engineered bulk gas installations, specialty liquid nitrogen, end-use equipment, and cryogenic flow meters for gas producers and distributors. In addition, it provides cryogenic trailers, ISO containers, railcars, bulk storage tanks, fuel stations, loading facilities, and regasification equipment for delivering liquefied natural gas into virtual pipeline applications; large vacuum insulated storage tanks as equipment for purchasers of standard liquefaction plants; and vacuum insulated containment vessels for the storage of biological materials in medical and veterinary laboratories, biotech/pharmaceutical research facilities, blood and tissue banks, large-scale repositories, and artificial insemination. Further, the company designs and manufactures pressure equipment for cryogenic, energy, and petrochemical end markets. Additionally, it provides plant start-up, 24/7 support, monitoring and process optimization, repairing, maintenance, and upgrading services, as well as extended warranties and parts; and operates service locations that undertake installation, service, repair, maintenance, and refurbishment of cryogenic products. The company was founded in 1992 and is headquartered in Ball Ground, Georgia.

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