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Q3 Earnings Preview for Green Plains (NasdaqGS:GPRE)

in EARNINGS/INVESTING IDEAS by

Green Plains Inc. (NasdaqGS:GPRE) is scheduled to report Q3 earnings results after markets close for trading on November 4, 2020.

The company is expected to report earnings of -$0.28/share on revenue of $544.9 million. The consensus earnings per share (EPS) of -$0.28/share is based on a poll of 6 analysts and represents a growth in eps of 75.3% over the same quarter last year, when the company reported earnings of -$1.15/share.

The revenue forecast of $544.9 million based on a poll of 5 analysts implies a year-over-year (YoY) decline in revenue of −13.8%. Last year the company reported $632.4 million in revenue for the quarter.

Expected to report EPS of -$0.28/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $544.94 $632.35 −13.8%
EPS -$0.28 -$1.15 75.3%

Earnings Call Trends

Historically, management has exceeded analyst expectations 3 out of the last 8 tracked quarters, and missed expectations 5 quarters.

What are your expectations from Green Plains Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.70 -$0.24 65.8% Beat
Q1, 2020 -$0.93 -$1.09 -16.8% Missed
Q4, 2019 -$0.56 -$0.41 26.8% Beat
Q3, 2019 -$1.11 -$1.15 -2.9% Missed
Q2, 2019 -$0.83 -$1.13 -36.5% Missed
Q1, 2019 -$0.88 -$1.06 -20.1% Missed
Q4, 2018 -$0.51 -$1.66 -228.8% Missed
Q3, 2018 -$0.49 -$0.31 37.0% 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 increasing 2.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 3, 2020 $12.93 $13.20 2.1% Increase
May 4, 2020 $5.65 $6.61 17.0% Increase
February 10, 2020 $12.41 $13.03 5.0% Increase
November 5, 2019 $13.05 $14.65 12.3% 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 −3.03, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.03 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Green Plains Inc. is currently trading at $14.84/share, down −3.9% for the day. The company is trading at approximately 83.4% of its 52-week high of $17.76/share. The company’s stock price is up 12.4% since the last earnings report and down −9.8% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 45.87 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:GPRE Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −4.96 and a forward P/E multiple of −14.28.

Green Plains Inc.’s current share price also implies a price-to-book (P/B) multiple of 0.71. 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) $14.84
P/E Ratio −5.0x
P/E Ratio (Fwd) −14.3x
PEG Ratio 0.0
Total Debt / Total Capital 45.8%
Levered Free Cash Flow -$65.641 million
EV / EBITDA −28.7x

Finbox

Green Plains Inc. is a small-cap stock with a market capitalization of $550.5 million and a total enterprise value of $1.065 billion. The company operates in the Energy sector and the Oil, Gas & Consumable Fuels industry.

Green Plains Inc. produces, markets, and distributes ethanol in the United States and internationally. The company operates in four segments: Ethanol Production, Agribusiness and Energy Services, Food and Ingredients, and Partnership. The Ethanol Production segment produces and sells ethanol, distiller grains, and corn oil. The Agribusiness and Energy Services segment engages in the grain procurement, handling, and storage activities; and commodity marketing business, which purchases, markets, sells, and distributes ethanol, distiller grains, and corn oil, as well as grain, natural gas, and other commodities in various markets. This segment also provides grain drying and storage services to grain producers. The Food and Ingredients segment produces, trades in, and sells corn and soybean oil. The Partnership segment offers fuel storage and transportation services. As of December 31, 2019, this segment operated through 32 ethanol storage facilities; 7 fuel terminal facilities; and a fleet of approximately 2,630 leased railcars. The company has a partnership agreement with GE Current to produce hand sanitizer. The company was formerly known as Green Plains Renewable Energy, Inc. and changed its name to Green Plains Inc. in May 2014. Green Plains Inc. was founded in 2004 and is headquartered in Omaha, Nebraska.

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