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Dycom Industries (DY) Down 0.1% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Dycom Industries (DY - Free Report) . Shares have lost about 0.1% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Dycom Industries due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Dycom Q2 Earnings Beat Estimates, Margins Up Y/Y
Dycom Industries Inc. reported impressive earnings for second-quarter fiscal 2021 (ended Jul 25, 2020). Notably, the bottom line not only surpassed the Zacks Consensus Estimate but also grew on a year-over-year basis.
Earnings & Revenue Discussion
Dycom reported adjusted earnings of $1.18 per share, surpassing the Zacks Consensus Estimate of 69 cents by a whopping 71%. Notably, the metric increased 8.3% from the year-ago earnings of $1.09 per share. Dycom experienced broad-based improvement in the services performed despite the complexity of a large customer program. Also, improved operating leverage and lower-than-expected disruptions from the COVID-19 pandemic helped it record higher year-over-year earnings.
Contract revenues of $823.9 million dipped 6.8% year over year and missed the consensus mark of $884.2 million by 2%. Organically, revenues fell 6.8% year over year. The company witnessed stable demand despite a challenging economic backdrop. Moreover, it witnessed solid growth from two of the top five customers.
The company’s top five customers contributed 76.6% to total contract revenues, which decreased 9.2% organically. Revenues from all other customers grew 2% organically for the quarter.
Dycom’s largest customer Verizon accounted for 19.8% of the total revenues. While CenturyLink (the second-largest customer) added 19.2% to total revenues, surging 14.2% on an organic basis, AT&T made up 16.3% of revenues. Comcast accounted for 15.9%, while Windstream — representing 5.3% of the total revenues — climbed 25.2% organically.
Dycom’s backlog at the end of the reported quarter totaled $6.441 billion, comparing unfavorably with $7.314 billion at fiscal 2020-end and $6.691 billion in the year-ago comparable period. Of the backlog, $2.455 billion is projected to be completed in the next 12 months.
Operating Highlights
Gross margin for the quarter was 20.1%, up 160 basis points (bps) from the year-ago level. Adjusted EBITDA margin of 12.5% expanded 120 bps from the year-ago level.
Financials
As of Jul 25, 2020, Dycom had cash and cash equivalents worth $22.5 million compared with $54.6 million on Jan 25, 2020. Long-term debt was $665.5 million at the end of the reported quarter compared with $844.4 million at fiscal 2020-end.
Fiscal Third-Quarter 2021 View
For the fiscal third quarter (ended Oct 24, 2020), it expects contract revenues and margins to range from in line to modestly lower sequentially.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 30.78% due to these changes.
VGM Scores
Currently, Dycom Industries has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Dycom Industries has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Dycom Industries (DY) Down 0.1% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Dycom Industries (DY - Free Report) . Shares have lost about 0.1% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Dycom Industries due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Dycom Q2 Earnings Beat Estimates, Margins Up Y/Y
Dycom Industries Inc. reported impressive earnings for second-quarter fiscal 2021 (ended Jul 25, 2020). Notably, the bottom line not only surpassed the Zacks Consensus Estimate but also grew on a year-over-year basis.
Earnings & Revenue Discussion
Dycom reported adjusted earnings of $1.18 per share, surpassing the Zacks Consensus Estimate of 69 cents by a whopping 71%. Notably, the metric increased 8.3% from the year-ago earnings of $1.09 per share. Dycom experienced broad-based improvement in the services performed despite the complexity of a large customer program. Also, improved operating leverage and lower-than-expected disruptions from the COVID-19 pandemic helped it record higher year-over-year earnings.
Contract revenues of $823.9 million dipped 6.8% year over year and missed the consensus mark of $884.2 million by 2%. Organically, revenues fell 6.8% year over year. The company witnessed stable demand despite a challenging economic backdrop. Moreover, it witnessed solid growth from two of the top five customers.
The company’s top five customers contributed 76.6% to total contract revenues, which decreased 9.2% organically. Revenues from all other customers grew 2% organically for the quarter.
Dycom’s largest customer Verizon accounted for 19.8% of the total revenues. While CenturyLink (the second-largest customer) added 19.2% to total revenues, surging 14.2% on an organic basis, AT&T made up 16.3% of revenues. Comcast accounted for 15.9%, while Windstream — representing 5.3% of the total revenues — climbed 25.2% organically.
Dycom’s backlog at the end of the reported quarter totaled $6.441 billion, comparing unfavorably with $7.314 billion at fiscal 2020-end and $6.691 billion in the year-ago comparable period. Of the backlog, $2.455 billion is projected to be completed in the next 12 months.
Operating Highlights
Gross margin for the quarter was 20.1%, up 160 basis points (bps) from the year-ago level. Adjusted EBITDA margin of 12.5% expanded 120 bps from the year-ago level.
Financials
As of Jul 25, 2020, Dycom had cash and cash equivalents worth $22.5 million compared with $54.6 million on Jan 25, 2020. Long-term debt was $665.5 million at the end of the reported quarter compared with $844.4 million at fiscal 2020-end.
Fiscal Third-Quarter 2021 View
For the fiscal third quarter (ended Oct 24, 2020), it expects contract revenues and margins to range from in line to modestly lower sequentially.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 30.78% due to these changes.
VGM Scores
Currently, Dycom Industries has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Dycom Industries has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.