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Welbilt Q3 Earnings Preview: NYSE:WBT Down −17.3% This Week

in EARNINGS/INVESTING IDEAS by

Welbilt, Inc. (NYSE:WBT) is scheduled to report Q3 earnings results on November 3, 2020.

The company is expected to report earnings of -$0.01/share on revenue of $271.7 million. The consensus earnings per share (EPS) of -$0.01/share is based on a poll of 10 analysts and represents a decline in eps of −102.9% over the same quarter last year, when the company reported earnings of $0.22/share.

The revenue forecast of $271.7 million based on a poll of 8 analysts implies a year-over-year (YoY) decline in revenue of −33.8%. Last year the company reported $410.5 million in revenue for the quarter.

Expected to report EPS of -$0.01/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $271.73 $410.50 −33.8%
EPS -$0.01 $0.22 −102.9%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, missed 3 quarters, and met expectations 1 quarter.

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

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.13 -$0.07 45.4% Beat
Q1, 2020 $0 $0.01 1,685.7% Beat
Q4, 2019 $0.18 $0.19 7.1% Beat
Q3, 2019 $0.25 $0.22 −11.9% Missed
Q2, 2019 $0.19 $0.22 17.1% Beat
Q1, 2019 $0.09 $0.05 −45.4% Missed
Q4, 2018 $0.18 $0.18 0% Met
Q3, 2018 $0.28 $0.25 −10.2% 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 reacted by increasing 16.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 4, 2020 $6.27 $7.28 16.1% Increase
May 5, 2020 $4.76 $4.46 −6.3% Decline
February 25, 2020 $13.40 $13.25 −1.1% Decline
November 5, 2019 $19.79 $18.38 −7.1% 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 −2.96, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.96 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

Welbilt, Inc. is currently trading at $6.08/share, down −0.5% for the day. The company is trading at approximately 30.7% of its 52-week high of $19.81/share. The company’s stock price is down −16.5% since the last earnings report and down −17.3% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 40.19 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:WBT Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 143.40 and a forward P/E multiple of −180.13.

Welbilt, Inc.’s current share price also implies a price-to-book (P/B) multiple of 4.00. 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) $6.08
P/E Ratio 143.4x
P/E Ratio (Fwd) −180.1x
PEG Ratio −1.6
Total Debt / Total Capital 64.0%
Levered Free Cash Flow $13.6 million
EV / EBITDA 10.8x

Finbox

Welbilt, Inc. is a small-cap stock with a market capitalization of $860.4 million and a total enterprise value of $2.256 billion. The company operates in the Industrials sector and the Machinery industry.

Welbilt, Inc., designs, manufactures, and supplies foodservice equipment for commercial foodservice market worldwide. The company offers commercial upright and undercounter refrigerators and freezers, blast freezers and chillers, and cook-chill systems under the Delfield brand; and walk-in refrigerators, coolers and freezers, and prefabricated cooler and freezer panels under the Kolpak brand. It also provides traditional, combination, convection, conveyor, and rapid-cooking ovens, and range and grill products under the Convotherm, Garland, Lincoln, and Merrychef brands; fryers and frying systems under the Frymaster brand; and steam equipment under the Cleveland brand. In addition, the company offers cafeteria and buffet equipment stations, bins, boxes, warming cabinets, warmers, display and deli cases, and insulated and refrigerated salad and food bars under the Delfield, Merco, and other brand names; beverage dispensers, blended ice machines, ice/beverage dispensers, beer coolers, post-mix dispensing valves, backroom equipment, and support system components and related equipment; ice machines under the Manitowoc and other brand names; coffee equipment under the Crem brand name; and other beverage-related products under the Multiplex and Manitowoc brand names. Further, it provides after-market parts, and installation and start-up, and preventative maintenance services; spare parts supply for Welbilt products under the KitchenCare brand; designed kitchens under FitKitchen brand; and KitchenConnect, a cloud based-application brand. It supplies its products to full-service restaurants, quick-service restaurant chains, hotels, resorts, cruise ships, caterers, supermarkets, convenience stores, hospitals, schools, and other institutions through dealers and distributors. The company was formerly known as Manitowoc Foodservice, Inc. and changed its name to Welbilt, Inc. in February 2017. Welbilt, Inc. was founded in 1902 and is headquartered in New Port Richey, Florida.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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