Q3 Earnings Preview for ONE Gas (NYSE:OGS)

in EARNINGS/INVESTING IDEAS by

ONE Gas, Inc. (NYSE:OGS) is scheduled to report Q3 earnings results after markets close for trading on November 2, 2020.

The company is expected to report earnings of $0.35/share on revenue of $242.4 million. The consensus earnings per share (EPS) of $0.35/share is based on a poll of 7 analysts and represents a growth in eps of 5.3% over the same quarter last year, when the company reported earnings of $0.33/share.

The revenue forecast of $242.4 million based on a poll of 4 analysts implies a year-over-year (YoY) decline in revenue of −2.5%. Last year the company reported $248.6 million in revenue for the quarter.

Expected to report EPS growth of 5.3% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $242.40 $248.56 −2.5%
EPS $0.35 $0.33 5.3%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, missed 2 quarters, and met expectations 1 quarter.

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

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.46 $0.48 4.8% Beat
Q1, 2020 $1.78 $1.72 −3.6% Missed
Q4, 2019 $0.95 $0.96 0.7% Beat
Q3, 2019 $0.33 $0.33 0% Met
Q2, 2019 $0.41 $0.46 12.9% Beat
Q1, 2019 $1.73 $1.76 1.5% Beat
Q4, 2018 $0.85 $0.84 −1.7% Missed
Q3, 2018 $0.27 $0.31 14.6% 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 did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 27, 2020 $77.25 $77.38 0.2% Increase
April 27, 2020 $87.05 $84.72 −2.7% Decline
February 19, 2020 $96.69 $95.06 −1.7% Decline
October 28, 2019 $94.24 $92.35 −2.0% Decline

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 −2.84, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.84 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

ONE Gas, Inc. is currently trading at $73.79/share, down −0.2% for the day. The company is trading at approximately 76.1% of its 52-week high of $96.97/share. The company’s stock price is down −4.6% since the last earnings report and up 2.1% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 62.74 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:OGS Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 21.04 and a forward P/E multiple of 20.62.

ONE Gas, Inc.’s current share price also implies a price-to-book (P/B) multiple of 1.78. 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) $73.79
P/E Ratio 21.0x
P/E Ratio (Fwd) 20.6x
PEG Ratio 6.0
Total Debt / Total Capital 31.7%
Levered Free Cash Flow -$120.1 million
EV / EBITDA 11.9x

Finbox

ONE Gas, Inc. is a mid-cap stock with a market capitalization of $3.905 billion and a total enterprise value of $5.707 billion. The company operates in the Utilities sector and the Gas Utilities industry.

ONE Gas, Inc. operates as a regulated natural gas distribution utility company in the United States. The company operates in three divisions: Oklahoma Natural Gas, Kansas Gas Service, and Texas Gas Service. It provides natural gas distribution services to 2.2 million customers in three states. The company serves residential, commercial and industrial, transportation and wholesale, and public authority customers. As of December 31, 2018, it operated approximately 40,300 miles of distribution mains; and 2,600 miles of transmission pipelines, as well as had 48.4 billion cubic feet of natural gas storage capacity. The company was founded in 1906 and is headquartered in Tulsa, Oklahoma.

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.

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