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UFP Industries (UFPI) Up 1.1% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for UFP Industries (UFPI - Free Report) . Shares have added about 1.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is UFP Industries due for a pullback? 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.
UFP Industries’ Q1 Earnings Top Estimates
UFP Industries, Inc. reported impressive first-quarter 2021 results, wherein both earnings and revenues not only surpassed the Zacks Consensus Estimate but also improved significantly on a year-over-year basis. Shares of the company jumped nearly 4% in after-hours trading on Apr 21, post the earnings release.
The company has been experiencing strong organic growth in retail and industrial segments along with site-built and factory-built housing business units.
On Apr 19, 2021, UFP Industries acquired Walnut Hollow Farm, which produces a variety of finely finished wood surfaces used in hobby, craft and woodworking projects as well as taxidermy. Additionally, Sunbelt Forest Products completed the acquisition of Spartanburg Forest Products and its affiliates on Apr 12, 2021. Both the buyouts will expand UFP Retail Solutions’ customer base and product offerings.
Earnings & Revenue Discussion
UFP Industries reported earnings of $1.67 per share, which comfortably surpassed the consensus mark of 90 cents by 85.6% and increased nearly 157% from the year-ago level of 65 cents.
Net sales of $1.83 billion outpaced the consensus mark of $1.49 billion by 22.8% and improved 77% on a year-over-year basis. Of this growth, 44% was contributed by elevated level of softwood lumber prices, while acquisitions and organic growth added 23% and 10%, respectively.
New product sales were $159.4 million for the quarter, up 58% year over year, driven by Deckorators Vault decking and deck accessories, UFP-Edge shiplap and trim, Handprint project panels along with ProWood Fire Retardant treated lumber.
Notably, the reported net sales and earnings marked the highest quarterly numbers in the company’s history despite seasonal disruptions.
End-Market Sales Discussion
UFP Retail: The segment reported sales of $759 million for the quarter, up 116% year over year. Unit sales also rose 19% organically from the year-ago quarter, backed by 30% growth in Handprint, 28% rise in Outdoor Essentials, 24% increase in UFP Edge and 64% improvement in Deckorators. Selling prices and acquisitions, primarily Sunbelt, drove the same by 56% and 41%, respectively.
UFP Industrial: The Industrial segment’s sales totaled $448.9 million, reflecting growth of 75% from the year-ago period. For the quarter, unit sales rose 37% year over year and selling prices increased 38%. Organic growth accounted for 5%, and acquisitions of PalletOne and T&R Lumber contributed 32% to unit sales growth.
UFP Construction: Sales in the segment were $559.5 million, up 47% year over year. This improvement in the segment sales is mainly attributable to 39% increase in selling price and 8% rise in unit sales. Unit sales to site-built and factory-built housing customers rose 21% and 15%, respectively. However, unit sales to commercial customers fell 9% from the prior-year quarter.
Operating Highlights
Gross margin of 15.7% contracted 50 basis points (bps) year over year. Selling, general and administrative expenses — accounting for 8.2% of net sales — improved 240 bps year over year. Adjusted EBITDA of $162.7 million increased 111% year over year.
Balance Sheet & Cash Flow
At the end of first-quarter 2021, cash and cash equivalents were $44.4 million compared with $436.5 million at 2020-end. For the first three months of 2021, net cash used in operating activities totaled $196.7 million compared with $46.2 million in the comparable 2020 period.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 41.83% due to these changes.
VGM Scores
At this time, UFP Industries has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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 UFP 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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UFP Industries (UFPI) Up 1.1% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for UFP Industries (UFPI - Free Report) . Shares have added about 1.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is UFP Industries due for a pullback? 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.
UFP Industries’ Q1 Earnings Top Estimates
UFP Industries, Inc. reported impressive first-quarter 2021 results, wherein both earnings and revenues not only surpassed the Zacks Consensus Estimate but also improved significantly on a year-over-year basis. Shares of the company jumped nearly 4% in after-hours trading on Apr 21, post the earnings release.
The company has been experiencing strong organic growth in retail and industrial segments along with site-built and factory-built housing business units.
On Apr 19, 2021, UFP Industries acquired Walnut Hollow Farm, which produces a variety of finely finished wood surfaces used in hobby, craft and woodworking projects as well as taxidermy. Additionally, Sunbelt Forest Products completed the acquisition of Spartanburg Forest Products and its affiliates on Apr 12, 2021. Both the buyouts will expand UFP Retail Solutions’ customer base and product offerings.
Earnings & Revenue Discussion
UFP Industries reported earnings of $1.67 per share, which comfortably surpassed the consensus mark of 90 cents by 85.6% and increased nearly 157% from the year-ago level of 65 cents.
Net sales of $1.83 billion outpaced the consensus mark of $1.49 billion by 22.8% and improved 77% on a year-over-year basis. Of this growth, 44% was contributed by elevated level of softwood lumber prices, while acquisitions and organic growth added 23% and 10%, respectively.
New product sales were $159.4 million for the quarter, up 58% year over year, driven by Deckorators Vault decking and deck accessories, UFP-Edge shiplap and trim, Handprint project panels along with ProWood Fire Retardant treated lumber.
Notably, the reported net sales and earnings marked the highest quarterly numbers in the company’s history despite seasonal disruptions.
End-Market Sales Discussion
UFP Retail: The segment reported sales of $759 million for the quarter, up 116% year over year. Unit sales also rose 19% organically from the year-ago quarter, backed by 30% growth in Handprint, 28% rise in Outdoor Essentials, 24% increase in UFP Edge and 64% improvement in Deckorators. Selling prices and acquisitions, primarily Sunbelt, drove the same by 56% and 41%, respectively.
UFP Industrial: The Industrial segment’s sales totaled $448.9 million, reflecting growth of 75% from the year-ago period. For the quarter, unit sales rose 37% year over year and selling prices increased 38%. Organic growth accounted for 5%, and acquisitions of PalletOne and T&R Lumber contributed 32% to unit sales growth.
UFP Construction: Sales in the segment were $559.5 million, up 47% year over year. This improvement in the segment sales is mainly attributable to 39% increase in selling price and 8% rise in unit sales. Unit sales to site-built and factory-built housing customers rose 21% and 15%, respectively. However, unit sales to commercial customers fell 9% from the prior-year quarter.
Operating Highlights
Gross margin of 15.7% contracted 50 basis points (bps) year over year. Selling, general and administrative expenses — accounting for 8.2% of net sales — improved 240 bps year over year. Adjusted EBITDA of $162.7 million increased 111% year over year.
Balance Sheet & Cash Flow
At the end of first-quarter 2021, cash and cash equivalents were $44.4 million compared with $436.5 million at 2020-end. For the first three months of 2021, net cash used in operating activities totaled $196.7 million compared with $46.2 million in the comparable 2020 period.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 41.83% due to these changes.
VGM Scores
At this time, UFP Industries has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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 UFP Industries has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.