Ritchie Bros. Auctioneers Q3 Earnings: Can NYSE:RBA Hit Its $0.30 EPS Target?

in EARNINGS/INVESTING IDEAS by

Ritchie Bros. Auctioneers Incorporated (NYSE:RBA) is scheduled to report Q3 earnings results after markets close for trading on November 5, 2020.

The company is expected to report earnings of $0.30/share on revenue of $306.6 million. The consensus earnings per share (EPS) of $0.30/share is based on a poll of 10 analysts and represents a growth in eps of 32.1% over the same quarter last year, when the company reported earnings of $0.23/share.

The revenue forecast of $306.6 million based on a poll of 8 analysts implies a year-over-year (YoY) growth in revenue of 5.8%. Last year the company reported $289.8 million in revenue for the quarter.

Expected to report EPS growth of 32.1% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $306.62 $289.80 5.8%
EPS $0.30 $0.23 32.1%

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 Ritchie Bros. Auctioneers Incorporated for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.36 $0.54 47.9% Beat
Q1, 2020 $0.19 $0.21 10.5% Beat
Q4, 2019 $0.41 $0.44 8.1% Beat
Q3, 2019 $0.22 $0.23 2.6% Beat
Q2, 2019 $0.43 $0.49 14.7% Beat
Q1, 2019 $0.22 $0.17 −22.1% Missed
Q4, 2018 $0.36 $0.32 −11.9% Missed
Q3, 2018 $0.18 $0.18 0% Met

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 15.5%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 6, 2020 $48.24 $55.71 15.5% Increase
May 7, 2020 $41.96 $44.31 5.6% Increase
February 27, 2020 $41.43 $39.70 −4.2% Decline
November 7, 2019 $41.48 $41.28 −0.5% 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 −2.98, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.98 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Ritchie Bros. Auctioneers Incorporated is currently trading at $60.29/share, down 0.0% for the day. The company is trading at approximately 91.8% of its 52-week high of $65.98/share. The company’s stock price is up 8.2% since the last earnings report and down −2.1% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 45.52 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:RBA Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 42.96 and a forward P/E multiple of 40.37.

Ritchie Bros. Auctioneers Incorporated’s current share price also implies a price-to-book (P/B) multiple of 7.30. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $60.29
P/E Ratio 43.0x
P/E Ratio (Fwd) 40.4x
PEG Ratio 2.6
Total Debt / Total Capital 10.8%
Levered Free Cash Flow $355.7 million
EV / EBITDA 25.4x

Finbox

Ritchie Bros. Auctioneers Incorporated is a mid-cap stock with a market capitalization of $6.563 billion and a total enterprise value of $6.971 billion. The company operates in the Industrials sector and the Commercial Services & Supplies industry.

Ritchie Bros. Auctioneers Incorporated, an asset management and disposition company, sells industrial equipment and other durable assets through its unreserved live on site auctions, online marketplaces, listing services, and private brokerage services. The company sells a range of used and unused equipment, including earthmoving equipment, truck trailers, government surplus, oil and gas equipment, and other industrial assets, as well as construction and heavy machinery. It also offers live auction events with online bidding. The company sells used equipment to its customers through live, unreserved auctions at 40 auction sites worldwide. It serves construction, transportation, agriculture, energy, oil and gas, mining, and forestry sectors. The company operates in the United States, Canada, Australia, the United Arab Emirates, the Netherlands, and internationally. Ritchie Bros. Auctioneers Incorporated was founded in 1958 and is headquartered in Burnaby, Canada.

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