Applied Industrial Technologies (NYSE:AIT) Q1 2021 Earnings Prep

in EARNINGS/INVESTING IDEAS by

Applied Industrial Technologies, Inc. (NYSE:AIT) is scheduled to report Q1 earnings results before markets open for trading on October 28, 2020.

The company is expected to report earnings of $0.64/share on revenue of $727.3 million. The consensus earnings per share (EPS) of $0.64/share is based on a poll of 5 analysts and represents a decline in eps of −37.5% over the same quarter last year, when the company reported earnings of $1.02/share.

The revenue forecast of $727.3 million based on a poll of 4 analysts implies a year-over-year (YoY) decline in revenue of −15.1%. Last year the company reported $856.4 million in revenue for the quarter.

Expected to report EPS contraction of −37.5% for Q1, 2021
Metric Expected Prior Year YoY Change
Revenue $727.30 $856.40 −15.1%
EPS $0.64 $1.02 −37.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, and missed expectations 3 quarters.

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

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q4, 2020 $0.69 $0.80 16.8% Beat
Q3, 2020 $1.01 $1.02 0.7% Beat
Q2, 2020 $0.95 $0.97 1.9% Beat
Q1, 2020 $1.01 $1.02 0.7% Beat
Q4, 2019 $1.17 $1.02 −13.1% Missed
Q3, 2019 $1.18 $1.16 −1.7% Missed
Q2, 2019 $1.06 $0.99 −6.6% Missed
Q1, 2019 $1.11 $1.14 2.7% 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 falling −7.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 12, 2020 $69.05 $64.15 −7.1% Decline
April 30, 2020 $56.62 $51.44 −9.1% Decline
January 23, 2020 $66.21 $65.81 −0.6% Decline
October 30, 2019 $57.47 $59.84 4.1% 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 −3.22, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.22 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Applied Industrial Technologies, Inc. is currently trading at $60.84/share, down −1.7% for the day. The company is trading at approximately 86.2% of its 52-week high of $70.62/share. The company’s stock price is down −5.2% since the last earnings report and down −3.2% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 54.71 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:AIT Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 98.08 and a forward P/E multiple of 19.20.

Applied Industrial Technologies, Inc.’s current share price also implies a price-to-book (P/B) multiple of 2.80. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q4
Period End Date June 30, 2020
Stock Price (Current) $60.84
P/E Ratio 98.1x
P/E Ratio (Fwd) 19.2x
PEG Ratio −1.2
Total Debt / Total Capital 30.0%
Levered Free Cash Flow $276.6 million
EV / EBITDA 10.6x

Finbox

Applied Industrial Technologies, Inc. is a mid-cap stock with a market capitalization of $2.358 billion and a total enterprise value of $3.106 billion. The company operates in the Industrials sector and the Trading Companies & Distributors industry.

Applied Industrial Technologies, Inc. distributes industrial products in North America, Australia, New Zealand, and Singapore. The company offers its products for maintenance, repair, and operational, as well as original equipment manufacturing customers. It operates in two segments, Service Center Based Distribution, and Fluid Power & Flow Control. The company distributes bearings, power transmission products, engineered fluid power components and systems, specialty flow control solutions, machinery and robotics automation products, industrial rubber products, linear motion components, tools, safety products, oilfield supplies, and other industrial and maintenance supplies; and offers motors, belting, drives, couplings, pumps, hydraulic and pneumatic components, filtration supplies, valves, fittings, process instrumentation, actuators, and hoses, as well as other related supplies for general operational needs of customers’ machinery and equipment. It also operates fabricated rubber shops and service field crews that install, modify, and repair conveyor belts and rubber linings, as well as offer hose assemblies. In addition, the company offers equipment repair and technical support services. It offers industrial products through a network of service centers. The company serves various industries, including agriculture and food processing, cement, chemicals and petrochemicals, fabricated metals, forest products, industrial machinery and equipment, mining, oil and gas, primary metals, transportation, and utilities, as well as to government entities. Applied Industrial Technologies, Inc. was founded in 1923 and is headquartered in Cleveland, Ohio.

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.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.