LCI Industries (NYSE:LCII) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

LCI Industries (NYSE:LCII) is scheduled to report Q3 earnings results before markets open for trading on November 2, 2020.

The company is expected to report earnings of $2.42/share on revenue of $799 million. The consensus earnings per share (EPS) of $2.42/share is based on a poll of 8 analysts and represents a growth in eps of 70.5% over the same quarter last year, when the company reported earnings of $1.42/share.

The revenue forecast of $799 million based on a poll of 6 analysts implies a year-over-year (YoY) growth in revenue of 36.3%. Last year the company reported $586.2 million in revenue for the quarter.

Expected to report EPS growth of 70.5% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $798.96 $586.22 36.3%
EPS $2.42 $1.42 70.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarter.

What are your expectations from LCI Industries for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.08 $0.54 763.1% Beat
Q1, 2020 $1.30 $1.31 0.5% Beat
Q4, 2019 $1.06 $1.14 7.4% Beat
Q3, 2019 $1.39 $1.42 2.2% Beat
Q2, 2019 $1.67 $1.89 12.8% Beat
Q1, 2019 $1.32 $1.38 4.5% Beat
Q4, 2018 $1.01 $0.82 −19.0% Missed
Q3, 2018 $1.32 $1.33 1.0% 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 −2.0%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 4, 2020 $130.75 $128.10 −2.0% Decline
May 5, 2020 $80.02 $81.90 2.3% Increase
February 11, 2020 $114.79 $112.97 −1.6% Decline
November 5, 2019 $103.22 $106.03 2.7% 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 −1.89, the model suggests that the company is a possible earnings manipulator. A value of −1.89 implies a 2.9% chance of earnings manipulation.

Fundamentals And Technical Analysis

LCI Industries is currently trading at $110.66/share, down −1.5% for the day. The company is trading at approximately 84.0% of its 52-week high of $131.71/share. The company’s stock price is down −13.6% since the last earnings report and down −7.6% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 44.61 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:LCII Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 26.26 and a forward P/E multiple of 19.38.

LCI Industries’s current share price also implies a price-to-book (P/B) multiple of 3.41. 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) $110.66
P/E Ratio 26.3x
P/E Ratio (Fwd) 19.4x
PEG Ratio −1.2
Total Debt / Total Capital 22.2%
Levered Free Cash Flow $154.5 million
EV / EBITDA 14.5x

Finbox

LCI Industries is a mid-cap stock with a market capitalization of $2.783 billion and a total enterprise value of $3.526 billion. The company operates in the Consumer Discretionary sector and the Auto Components industry.

LCI Industries, together with its subsidiaries, manufactures and supplies components for the manufacturers of recreational vehicles (RVs) and adjacent industries in the United States and internationally. It operates in two segments, Original Equipment Manufacturers (OEM) and Aftermarket. The OEM segment manufactures and distributes a range of engineered components, such as steel chassis and related components; axles and suspension solutions; slide-out mechanisms and solutions; thermoformed bath, kitchen, and other products; vinyl, aluminum, and frameless windows; manual, electric, and hydraulic stabilizer and leveling systems; entry, luggage, patio, and ramp doors; furniture and mattresses; electric and manual entry steps; awnings and awning accessories; towing products; truck accessories; electronic components; and other accessories. This segment serves OEMs of RVs and adjacent industries, including buses; trailers used to haul boats, livestock, equipment, and other cargo; trucks; boats; trains; manufactured homes; and modular housing, as well as travel trailers, fifth-wheel travel trailers, folding camping trailers, and truck campers. The Aftermarket segment supplies various components of RV and adjacent industries to retail dealers, wholesale distributors, and service centers. This segment also sells replacement glass and awnings to fulfill insurance claims, biminis, covers, buoys, and fenders to the marine industry. The company was formerly known as Drew Industries Incorporated and changed its name to LCI Industries in December 2016. LCI Industries was incorporated in 1984 and is based in Elkhart, Indiana.

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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