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Q3 Earnings Preview for Tractor Supply (NasdaqGS:TSCO)

in EARNINGS/INVESTING IDEAS by

Tractor Supply Company (NasdaqGS:TSCO) is scheduled to report Q3 earnings results before markets open for trading on October 22, 2020.

The company is expected to report earnings of $1.36/share on revenue of $2.41 billion. The consensus earnings per share (EPS) of $1.36/share is based on a poll of 28 analysts and represents a growth in eps of 30.9% over the same quarter last year, when the company reported earnings of $1.04/share.

The revenue forecast of $2.41 billion based on a poll of 25 analysts implies a year-over-year (YoY) growth in revenue of 21.5%. Last year the company reported $1.984 billion in revenue for the quarter.

Expected to report EPS growth of 30.9% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $2,410.48 $1,984.14 21.5%
EPS $1.36 $1.04 30.9%

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 Tractor Supply Company for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $2.61 $2.90 10.9% Beat
Q1, 2020 $0.70 $0.71 1.1% Beat
Q4, 2019 $1.23 $1.21 −1.5% Missed
Q3, 2019 $1.03 $1.04 1.2% Beat
Q2, 2019 $1.81 $1.80 −0.5% Missed
Q1, 2019 $0.56 $0.63 13.0% Beat
Q4, 2018 $1.09 $1.11 2.0% Beat
Q3, 2018 $0.87 $0.95 9.1% 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 27, 2020, the stock price did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 23, 2020 $145.95 $146.53 0.4% Increase
April 23, 2020 $95.43 $101.98 6.9% Increase
January 30, 2020 $95.02 $92.95 −2.2% Decline
October 24, 2019 $95.12 $96.46 1.4% Increase

Fundamentals And Technical Analysis

Tractor Supply Company is currently trading at $150.98/share, down −1.4% for the day. The company is trading at approximately 96.1% of its 52-week high of $157.07/share. The company’s stock price is up 3.0% since the last earnings report and down −1.3% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 57.52 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:TSCO Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 25.48 and a forward P/E multiple of 24.17.

Tractor Supply Company’s current share price also implies a price-to-book (P/B) multiple of 10.35. 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 27, 2020
Stock Price (Current) $150.98
P/E Ratio 25.5x
P/E Ratio (Fwd) 24.2x
PEG Ratio 0.9
Total Debt / Total Capital 15.8%
Levered Free Cash Flow $1.235 billion
EV / EBITDA 17.6x

Finbox

Tractor Supply Company is a large-cap stock with a market capitalization of $17.547 billion and a total enterprise value of $19.677 billion. The company operates in the Consumer Discretionary sector and the Specialty Retail industry.

Tractor Supply Company operates rural lifestyle retail stores in the United States. The company offers a selection of merchandise, including equine, livestock, pet, and small animal products necessary for their health, care, growth, and containment; hardware, truck, towing, and tool products; seasonal products, such as heating products, lawn and garden items, power equipment, gifts, and toys; work/recreational clothing and footwear; and maintenance products for agricultural and rural use. It provides its products under the 4health, Producer’s Pride, Bit & Bridle, Red Shed, Blue Mountain, Redstone, C.E. Schmidt, Retriever, Countyline, Ridgecut, Dumor, Royal Wing, Groundwork, Traveller, Huskee, Treeline, JobSmart, TSC Tractor Supply Co, Paws & Claws, and Untamed brand names. As of December 28, 2019, it operated 2,024 retail stores in 49 states. The company operates its retail stores under the Tractor Supply Company, Del’s Feed & Farm Supply, and Petsense names. It also operates Websites under the TractorSupply.com and Petsense.com names. The company sells its products to recreational farmers, ranchers, and others, as well as tradesmen and small businesses. Tractor Supply Company was founded in 1938 and is based in Brentwood, Tennessee.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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