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MasterCraft Boat Q1 Earnings: Can NasdaqGM:MCFT Hit Its $0.33 EPS Target?

in EARNINGS/INVESTING IDEAS by

MasterCraft Boat Holdings, Inc. (NasdaqGM:MCFT) is scheduled to report Q1 earnings results on November 11, 2020.

The company is expected to report earnings of $0.33/share on revenue of $96.172 million. The consensus earnings per share (EPS) of $0.33/share is based on a poll of 5 analysts and represents a decline in eps of −37.4% over the same quarter last year, when the company reported earnings of $0.53/share.

The revenue forecast of $96.172 million based on a poll of 5 analysts implies a year-over-year (YoY) decline in revenue of −12.4%. Last year the company reported $109.8 million in revenue for the quarter.

Expected to report EPS contraction of −37.4% for Q1, 2021
Metric Expected Prior Year YoY Change
Revenue $96.17 $109.79 −12.4%
EPS $0.33 $0.53 −37.4%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarter.

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

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q4, 2020 -$0.18 -$0.10 45.9% Beat
Q3, 2020 $0.51 $0.46 −8.9% Missed
Q2, 2020 $0.35 $0.43 22.3% Beat
Q1, 2020 $0.43 $0.53 21.8% Beat
Q4, 2019 $0.81 $0.85 5.2% Beat
Q3, 2019 $0.67 $0.78 16.7% Beat
Q2, 2019 $0.59 $0.64 9.3% Beat
Q1, 2019 $0.51 $0.54 5.9% 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 −20.3%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
September 9, 2020 $22.46 $17.91 −20.3% Decline
May 6, 2020 $10.12 $10.54 4.2% Increase
February 5, 2020 $17.16 $19.16 11.7% Increase
November 7, 2019 $16.51 $17.78 7.7% 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 −4.29, the model suggests that the company is not likely to be an earnings manipulator. A value of −4.29 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

MasterCraft Boat Holdings, Inc. is currently trading at $22.73/share, down −0.2% for the day. The company is trading at approximately 95.2% of its 52-week high of $23.94/share. The company’s stock price is up 26.9% since the last earnings report and up 8.0% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 66.43 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGM:MCFT Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −17.88 and a forward P/E multiple of 11.81.

MasterCraft Boat Holdings, Inc.’s current share price also implies a price-to-book (P/B) multiple of 8.80. The following table summarizes some other key fundamental ratios:

Data as of November 9, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q4
Period End Date June 30, 2020
Stock Price (Current) $22.73
P/E Ratio −17.9x
P/E Ratio (Fwd) 11.8x
PEG Ratio 0.1
Total Debt / Total Capital 20.1%
Levered Free Cash Flow $15.957 million
EV / EBITDA 12.5x

Finbox

MasterCraft Boat Holdings, Inc. is a small-cap stock with a market capitalization of $432.3 million and a total enterprise value of $524.6 million. The company operates in the Consumer Discretionary sector and the Leisure Products industry.

MasterCraft Boat Holdings, Inc., through its subsidiaries, designs, manufactures, and markets recreational powerboats. It operates through three segments: MasterCraft, NauticStar, and Crest. The MasterCraft segment produces recreational performance sport boats and luxury day boats under the MasterCraft and Aviara brands, which are used for water skiing, wakeboarding, and wake surfing, as well as general recreational boating. The NauticStar segment offers boats that are primarily used for saltwater fishing and general recreational boating. The Crest segment produces pontoon boats for use in general recreational boating. The company also offers various accessories, including trailers and aftermarket parts. It sells its boats through a network of independent dealers in North America and internationally. The company was formerly known as MCBC Holdings, Inc. and changed its name to MasterCraft Boat Holdings, Inc. in November 2018. MasterCraft Boat Holdings, Inc. was founded in 1968 and is based in Vonore, Tennessee.

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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