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Avista Q3 Earnings: Can NYSE:AVA Hit Its $0.15 EPS Target?

in EARNINGS/INVESTING IDEAS by

Avista Corporation (NYSE:AVA) is scheduled to report Q3 earnings results on November 4, 2020.

The company is expected to report earnings of $0.15/share on revenue of $301.1 million. The consensus earnings per share (EPS) of $0.15/share is based on a poll of 5 analysts and represents a growth in eps of 82.5% over the same quarter last year, when the company reported earnings of $0.08/share.

The revenue forecast of $301.1 million based on a poll of 3 analysts implies a year-over-year (YoY) growth in revenue of 6.1%. Last year the company reported $283.8 million in revenue for the quarter.

Expected to report EPS growth of 82.5% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $301.10 $283.77 6.1%
EPS $0.15 $0.08 82.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, and missed expectations 4 quarters.

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

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.33 $0.26 −20.2% Missed
Q1, 2020 $0.65 $0.72 10.8% Beat
Q4, 2019 $0.69 $0.76 10.5% Beat
Q3, 2019 $0.15 $0.08 −46.7% Missed
Q2, 2019 $0.35 $0.38 9.7% Beat
Q1, 2019 $0.90 $0.75 −16.4% Missed
Q4, 2018 $0.65 $0.72 11.2% Beat
Q3, 2018 $0.19 $0.17 −12.7% Missed

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
August 5, 2020 $36.97 $36.92 −0.1% Decline
May 8, 2020 $40.10 $39.93 −0.4% Decline
February 26, 2020 $49.05 $48.57 −1.0% Decline
November 7, 2019 $47.36 $46.76 −1.3% 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 −2.91, 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

Avista Corporation is currently trading at $33.33/share, down −3.2% for the day. The company is trading at approximately 63.2% of its 52-week high of $53/share. The company’s stock price is down −9.7% since the last earnings report and down −1.2% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 50.65 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:AVA Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 18.58 and a forward P/E multiple of 18.86.

Avista Corporation’s current share price also implies a price-to-book (P/B) multiple of 1.15. 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) $33.33
P/E Ratio 18.6x
P/E Ratio (Fwd) 18.9x
PEG Ratio −0.5
Total Debt / Total Capital 51.4%
Levered Free Cash Flow -$86.573 million
EV / EBITDA 10.6x

Finbox

Avista Corporation is a mid-cap stock with a market capitalization of $2.339 billion and a total enterprise value of $4.698 billion. The company operates in the Utilities sector and the Multi-Utilities industry.

Avista Corporation operates as an electric and natural gas utility company. It operates through two segments, Avista Utilities and AEL&P. The Avista Utilities segment provides electric distribution and transmission, and natural gas distribution services in parts of eastern Washington and northern Idaho; and natural gas distribution services in parts of northeastern and southwestern Oregon, as well as generates electricity in Washington, Idaho, Oregon, and Montana. This segment also engages in the wholesale purchase and sale of electricity and natural gas. The AEL&P segment offers electric services to approximately 17,000 customers in the city and borough of Juneau, Alaska. The company generates electricity through hydro, thermal, and wind facilities. As of February 8, 2019, it provided electric service to approximately 393,000 customers and natural gas to approximately 361,000 customers. In addition, the company engages in venture fund investments, real estate investments, and other investments. Avista Corporation was founded in 1889 and is headquartered in Spokane, Washington.

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