Foundation Building Materials Q3 Earnings: Can NYSE:FBM Hit Its $0.27 EPS Target?

in EARNINGS/INVESTING IDEAS by

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.

Expected to report EPS contraction of −17.0% for Q3, 2020
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!

Analyst Expected vs. Reported EPS
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%.

Stock Price Performance After Earnings
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.


NYSE:FBM Stock Price Chart
Source: Finbox

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:

Data as of October 27, 2020
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

Finbox

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.

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.