A month has gone by since the last earnings report for Dycom Industries, Inc. DY. Shares have lost about 4.8% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Dycom Posts Solid Q2 Earnings Beat; Outlook Bright
Dycom continued its winning streak as its fiscal second-quarter adjusted earnings of $0.82 a share trumped the Zacks Consensus Estimate of $0.69 by 18.8%.
The figure also steered past the projected range of $0.61–$0.73. The bottom-line figure was even more remarkable on a year-over-year basis, surging a striking 51.9%, compared with the year-ago tally of $0.54 per share. Robust operating performance, solid activity on recent contracts and a stellar top-line improvement proved conducive to the bottom-line performance.
Inside the Headlines
Dycom’s fiscal second quarter 2017 contract revenues continued their strong momentum and came in at $701.1 million, up 25.3% year over year. Also, the top line surpassed the Zacks Consensus Estimate of $662 million. In addition, the figure came way ahead than the projected range of $640–$670 million.
Contract revenues grew 22.9%, on an organic basis. Acquisitions too, added $13.4 million in revenues, significantly supplementing the revenue stream.
Extensive deployment of 1-Gigabyte wireline networks by major customers and increasing rollout of fiber by cable operators in small and medium businesses boosted the top-line growth. The ongoing Connect America Fund II project also resulted in multiple lucrative projects, thus boosting the overall sales performance.
The company reported non-GAAP adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $86.2 million for the quarter, compared with $66.4 million recorded a year ago.
Liquidity
Dycom exited the quarter with cash and cash equivalents of $29.5 million compared with $33.8 million as of Jul 30, 2016. The company’s long-term debt was $740.6 million as of Jan 28, 2017, compared with $706.2 million as of Jul 30, 2016.
Guidance
Dycom issued guidance for third-quarter fiscal 2017, wherein adjusted earnings per share are projected in the range of $1.11–$1.24 on revenues within a range of $715–$745 million.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been three upward revisions for the current quarter. In the past month, the consensus estimate also shifted upward by 5.1% due to these changes.
Dycom Industries, Inc. Price and Consensus
Dycom Industries, Inc. Price and Consensus | Dycom Industries, Inc. Quote
VGM Scores
At this time, Dycom's stock has a great Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. It comes with little surprise that the stock has a Zacks Rank #1 (Strong Buy). We are expecting an above average return from the stock in the next few months.
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Dycom Industries, Inc. (DY): Free Stock Analysis Report
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Zacks Investment Research
April 03, 2017 at 05:23PM
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