Q3 Earnings Preview for SiteOne Landscape Supply (NYSE:SITE)

in EARNINGS/INVESTING IDEAS by

SiteOne Landscape Supply, Inc. (NYSE:SITE) is scheduled to report Q3 earnings results before markets open for trading on October 28, 2020.

The company is expected to report earnings of $0.84/share on revenue of $701.8 million. The consensus earnings per share (EPS) of $0.84/share is based on a poll of 7 analysts and represents a growth in eps of 2.3% over the same quarter last year, when the company reported earnings of $0.82/share.

The revenue forecast of $701.8 million based on a poll of 8 analysts implies a year-over-year (YoY) growth in revenue of 7.5%. Last year the company reported $652.8 million in revenue for the quarter.

Expected to report EPS growth of 2.3% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $701.78 $652.80 7.5%
EPS $0.84 $0.82 2.3%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters.

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

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $1.50 $1.85 22.6% Beat
Q1, 2020 -$0.55 -$0.41 26.0% Beat
Q4, 2019 -$0.06 $0.08 242.6% Beat
Q3, 2019 $0.75 $0.82 10.3% Beat
Q2, 2019 $1.66 $1.54 −7.3% Missed
Q1, 2019 -$0.47 -$0.56 -18.8% Missed
Q4, 2018 -$0.07 -$0.04 39.2% Beat
Q3, 2018 $0.72 $0.75 4.2% 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 28, 2020, the stock price reacted by increasing 2.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 29, 2020 $120.35 $122.93 2.1% Increase
April 29, 2020 $86.44 $88.63 2.5% Increase
February 18, 2020 $105.71 $114.17 8.0% Increase
October 30, 2019 $80.19 $88.06 9.8% 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 −2.91, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.91 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

SiteOne Landscape Supply, Inc. is currently trading at $124/share, down −1.2% for the day. The company is trading at approximately 90.0% of its 52-week high of $137.73/share. The company’s stock price is up 0.9% since the last earnings report and down −8.2% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 47.80 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:SITE Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 55.47 and a forward P/E multiple of 55.40.

SiteOne Landscape Supply, Inc.’s current share price also implies a price-to-book (P/B) multiple of 11.84. 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 28, 2020
Stock Price (Current) $124
P/E Ratio 55.5x
P/E Ratio (Fwd) 55.4x
PEG Ratio 1.3
Total Debt / Total Capital 13.9%
Levered Free Cash Flow $245 million
EV / EBITDA 30.1x

Finbox

SiteOne Landscape Supply, Inc. is a mid-cap stock with a market capitalization of $5.475 billion and a total enterprise value of $6.204 billion. The company operates in the Industrials sector and the Trading Companies & Distributors industry.

SiteOne Landscape Supply, Inc. engages in the wholesale distribution of landscape supplies in the United States and Canada. The company provides a selection of approximately 120,000 stock keeping units, including irrigation supplies, which consists controllers, valves, sprinkler heads, and irrigation and drainage pipes; fertilizers, grass seed, and ice melt products; control products, which include herbicides, fungicides, rodenticides, and other pesticides; landscape accessories, which comprise mulches, soil amendments, tools, and sod; nursery goods, which consist of deciduous shrubs, evergreen shrubs and trees, ornamental trees, shade trees, both field grown and container-grown nursery stock, and plant species; and outdoor lighting products, which include accent lights, dark lights, path lights, up lights, down lights, wall lights, and pool and aquatic area lighting, as well as hardscapes, such as pavers, natural stones, blocks, and other durable materials. It also offers consultative services consisting of assistance with irrigation network design, commercial project planning, generation of sales leads, marketing services and product support, and a series of technical and business management seminars; and distributes branded products of third parties. As of December 29, 2019, the company had 550 branches in the 45 United States and six Canadian provinces. It offers its products under LESCO, SiteOne Green Tech, and Pro-Trade brand names. The company markets its products primarily to residential and commercial landscape professionals who specialize in the design, installation, and maintenance of lawns, gardens, golf courses, and other outdoor spaces through branch network and direct distribution. SiteOne Landscape Supply, Inc. is headquartered in Roswell, Georgia.

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