Lindsay Q4 Earnings: Can NYSE:LNN Hit Its $0.99 EPS Target?

in EARNINGS/INVESTING IDEAS by

Lindsay Corporation (NYSE:LNN) is scheduled to report Q4 earnings results before markets open for trading on October 22, 2020.

The company is expected to report earnings of $0.99/share on revenue of $117 million. The consensus earnings per share (EPS) of $0.99/share is based on a poll of 5 analysts and represents a growth in eps of 82.6% over the same quarter last year, when the company reported earnings of $0.54/share.

The revenue forecast of $117 million based on a poll of 4 analysts implies a year-over-year (YoY) growth in revenue of 14.8%. Last year the company reported $101.9 million in revenue for the quarter.

Expected to report EPS growth of 82.6% for Q4, 2020
Metric Expected Prior Year YoY Change
Revenue $116.97 $101.89 14.8%
EPS $0.99 $0.54 82.6%

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 Lindsay Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q3, 2020 $0.88 $0.93 5.4% Beat
Q2, 2020 $0.46 $0.51 11.5% Beat
Q1, 2020 $0.55 $0.77 40.5% Beat
Q4, 2019 $0.35 $0.54 53.6% Beat
Q3, 2019 $0.76 $0.50 −34.4% Missed
Q2, 2019 $0.55 $0.02 −96.4% Missed
Q1, 2019 $0.42 $0.38 −10.4% Missed
Q4, 2018 $0.74 $0.42 −43.2% Missed

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 May 31, 2020, the stock price reacted by increasing 3.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 2, 2020 $90.60 $93.72 3.4% Increase
April 7, 2020 $94.45 $96.58 2.3% Increase
January 9, 2020 $96.69 $105.22 8.8% Increase
October 29, 2019 $93 $96.24 3.5% Increase

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 −2.86, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.86 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

Lindsay Corporation is currently trading at $105.07/share, down −1.6% for the day. The company is trading at approximately 94.0% of its 52-week high of $111.76/share. The company’s stock price is up 12.1% since the last earnings report and down −1.3% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 58.78 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:LNN Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 44.72 and a forward P/E multiple of 32.81.

Lindsay Corporation’s current share price also implies a price-to-book (P/B) multiple of 4.02. The following table summarizes some other key fundamental ratios:

Data as of October 20, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q3
Period End Date May 31, 2020
Stock Price (Current) $105.07
P/E Ratio 44.7x
P/E Ratio (Fwd) 32.8x
PEG Ratio 0.1
Total Debt / Total Capital 11.0%
Levered Free Cash Flow $24.119 million
EV / EBITDA 19.9x

Finbox

Lindsay Corporation is a small-cap stock with a market capitalization of $1.138 billion and a total enterprise value of $1.164 billion. The company operates in the Industrials sector and the Machinery industry.

Lindsay Corporation, together with its subsidiaries, provides water management and road infrastructure products and services in the United States and internationally. The company operates through two segments, Irrigation and Infrastructure. The Irrigation segment manufactures and markets center pivot, lateral move irrigation systems, and irrigation controls under the Zimmatic brand; hose reel travelers under the Perrot and Greenfield brands; and chemical injection systems, variable rate irrigation systems, flow meters, weather stations, soil moisture sensors, and remote monitoring and control systems under the GrowSmart brand. It also offers repair and replacement parts for irrigation systems and controls; and M2M communication technology solutions, data acquisition and management systems, and custom electronic equipment under the Elecsys brand. The Infrastructure segment provides Quickchange moveable barrier systems that help in highway reconstruction, paving and resurfacing, road widening, median and shoulder construction, and tunnels and bridge repairs; and re-directive and non-re-directive crash cushions, which are used to enhance highway safety at locations, such as toll booths, freeway off-ramps, medians and roadside barrier ends, bridge supports, utility poles, and other fixed roadway hazards. It also offers specialty barrier products; road marking and road safety equipment; and railroad signals and structures, and diameter steel tubing products, as well as outsourced manufacturing and production services for other companies. The company serves departments of transportation, municipal transportation road agencies, roadway contractors, subcontractors, distributors, and dealers. Lindsay Corporation was founded in 1954 and is headquartered in Omaha, Nebraska.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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