Foundation Building Materials, Inc. (NYSE:FBM) is scheduled to report Q3 earnings results after markets close for trading on November 2, 2020.
The company is expected to report earnings of $0.27/share on revenue of $532.6 million. The consensus earnings per share (EPS) of $0.27/share is based on a poll of 8 analysts and represents a decline in eps of −17.0% over the same quarter last year, when the company reported earnings of $0.33/share.
The revenue forecast of $532.6 million based on a poll of 7 analysts implies a year-over-year (YoY) decline in revenue of −5.7%. Last year the company reported $564.9 million in revenue for the quarter.
| Metric | Expected | Prior Year | YoY Change |
|---|---|---|---|
| Revenue | $532.57 | $564.91 | −5.7% |
| EPS | $0.27 | $0.33 | −17.0% |
Earnings Call Trends
Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.
What are your expectations from Foundation Building Materials, Inc. for earnings this quarter? Let us know in the comments!
| Quarter | Expected | Reported | Surprise | Result |
|---|---|---|---|---|
| Q2, 2020 | $0.16 | $0.27 | 72.3% | Beat |
| Q1, 2020 | $0.13 | $0.22 | 74.3% | Beat |
| Q4, 2019 | $0.18 | $0.26 | 44.4% | Beat |
| Q3, 2019 | $0.31 | $0.33 | 5.2% | Beat |
| Q2, 2019 | $0.26 | $0.37 | 40.3% | Beat |
| Q1, 2019 | $0.09 | $0.14 | 63.7% | Beat |
| Q4, 2018 | $0.10 | $0.16 | 60.9% | Beat |
| Q3, 2018 | $0.14 | $0.19 | 34.7% | 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 increasing 13.2%.
| Report Date | Price Day Prior | Price Next Day | Change % | Result |
|---|---|---|---|---|
| August 3, 2020 | $13.73 | $15.54 | 13.2% | Increase |
| May 11, 2020 | $11.97 | $12.19 | 1.8% | Increase |
| February 24, 2020 | $18.12 | $15.70 | −13.4% | Decline |
| November 4, 2019 | $19.04 | $20.70 | 8.7% | 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 −3.20, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.20 implies a 0.1% chance of earnings manipulation.
Fundamentals And Technical Analysis
Foundation Building Materials, Inc. is currently trading at $15.54/share, down −4.8% for the day. The company is trading at approximately 70.2% of its 52-week high of $22.14/share. The company’s stock price is up 0.0% since the last earnings report and down −9.0% over the previous week.
The company’s 14 Day Relative Price Index (RSI) of 39.02 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 14.44 and a forward P/E multiple of 17.11.
Foundation Building Materials, Inc.’s current share price also implies a price-to-book (P/B) multiple of 1.56. The following table summarizes some other key fundamental ratios:
| Metric | Value |
|---|---|
| Last Reported Fiscal Period Key | FY2020.Q2 |
| Period End Date | June 30, 2020 |
| Stock Price (Current) | $15.54 |
| P/E Ratio | 14.4x |
| P/E Ratio (Fwd) | 17.1x |
| PEG Ratio | 0.0 |
| Total Debt / Total Capital | 46.8% |
| Levered Free Cash Flow | $175.2 million |
| EV / EBITDA | 7.8x |
Foundation Building Materials, Inc. is a small-cap stock with a market capitalization of $671.4 million and a total enterprise value of $1.262 billion. The company operates in the Industrials sector and the Trading Companies & Distributors industry.
Foundation Building Materials, Inc. distributes building products in the United States and Canada. It offers wallboard, suspended ceiling system, and metal framing products. The company also provides complementary and other products, tools, and accessories, such as wallboard accessories, stucco and finishing systems, safety accessories, fasteners, insulations, doors, and roofing products. It serves its products to commercial, residential, and other specialty contractors. The company was founded in 2011 and is headquartered in Santa Ana, California. Foundation Building Materials, Inc. is a subsidiary of Lone Star Fund IX (U.S.) L.P.
