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SP Plus Q3 Earnings: Can NasdaqGS:SP Hit Its -$0.34 EPS Target?

in EARNINGS/INVESTING IDEAS by

SP Plus Corporation (NasdaqGS:SP) is scheduled to report Q3 earnings results after markets close for trading on November 5, 2020.

The company is expected to report earnings of -$0.34/share on revenue of $124.7 million. The consensus earnings per share (EPS) of -$0.34/share is based on a poll of 4 analysts and represents a decline in eps of −144.2% over the same quarter last year, when the company reported earnings of $0.77/share.

The revenue forecast of $124.7 million based on a poll of 3 analysts implies a year-over-year (YoY) decline in revenue of −47.4%. Last year the company reported $237.2 million in revenue for the quarter.

Expected to report EPS of -$0.34/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $124.73 $237.20 −47.4%
EPS -$0.34 $0.77 −144.2%

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 SP Plus Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.01 -$0.86 -5,633.3% Missed
Q1, 2020 $0.54 $0.64 19.6% Beat
Q4, 2019 $0.60 $0.55 −7.9% Missed
Q3, 2019 $0.67 $0.77 15.8% Beat
Q2, 2019 $0.73 $0.81 10.6% Beat
Q1, 2019 $0.45 $0.60 33.3% Beat
Q4, 2018 $0.48 $0.57 18.1% Beat
Q3, 2018 $0.61 $0.64 5.3% 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 falling −9.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 6, 2020 $17.62 $16.02 −9.1% Decline
May 7, 2020 $18.53 $19.59 5.7% Increase
February 19, 2020 $44.57 $41 −8.0% Decline
October 30, 2019 $39.93 $44.17 10.6% 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 −3.29, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.29 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

SP Plus Corporation is currently trading at $18.43/share, down −1.0% for the day. The company is trading at approximately 38.9% of its 52-week high of $47.33/share. The company’s stock price is up 15.0% since the last earnings report and down −1.1% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 50.81 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:SP Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −6.84 and a forward P/E multiple of −29.24.

SP Plus Corporation’s current share price also implies a price-to-book (P/B) multiple of 1.59. The following table summarizes some other key fundamental ratios:

Data as of November 1, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $18.43
P/E Ratio −6.8x
P/E Ratio (Fwd) −29.2x
PEG Ratio 0.0
Total Debt / Total Capital 63.0%
Levered Free Cash Flow $66.7 million
EV / EBITDA 16.1x

Finbox

SP Plus Corporation is a small-cap stock with a market capitalization of $425.5 million and a total enterprise value of $1.137 billion. The company operates in the Industrials sector and the Commercial Services & Supplies industry.

SP Plus Corporation provides parking management, ground transportation, baggage, and other ancillary services in North America. It provides on-site parking management, valet parking, ground transportation, facility maintenance, event logistics, baggage handling, remote airline check-in, security, municipal meter revenue collection and enforcement, and consulting services. The company also offers shuttle bus vehicles and the drivers; ground transportation services, such as taxi and livery dispatch, concierge-type ground transportation information, and support services for arriving passengers; remote airline check-in services; wheelchair assist services; baggage repair and replacement services; on-street parking meter collection and other forms of parking enforcement services; valet services; and remote parking management services. In addition, it provides facility maintenance services, including power sweeping and washing, painting and general repairs, and cleaning and seasonal services; security services comprising training and hiring of security officers and patrol, as well as customized services and technology; and multi-platform marketing services. The company offers its services primarily under the SP+ and Bags brands. SP Plus Corporation serves private and public owners, municipalities and governments, managers and developers of office buildings, residential properties, commercial properties, shopping centers and other retail properties, healthcare facilities and medical centers, sports and special event complexes, hotels and resorts, and airlines and cruise lines. The company was formerly known as Standard Parking Corporation and changed its name to SP Plus Corporation in December 2013. SP Plus Corporation was founded in 1929 and is based in Chicago, Illinois.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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