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Why Is Dycom (DY) Up 11.9% Since the Last Earnings Report?

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More than a month has gone by since the last earnings report for Dycom Industries, Inc. (DY - Free Report) . Shares have added about 11.9% in that time frame, outperforming the market.

Will the recent positive trend continue leading up to the stock's next earnings release, or is it 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.

Dycom Q4 Earnings Beat Estimates, Sales Miss

Dycom continued its winning streak for the sixth consecutive quarter, as its fourth-quarter fiscal 2017 adjusted earnings of $1.47 per share, beating the Zacks Consensus Estimate of $1.44 by 2.1%.

However, the bottom line came in 10.4% lower than the year-ago tally of $1.64.

For fiscal 2017, the company posted adjusted earnings of $168.3 million ($5.26 per share), up 13.4% from the prior-year figure of $148.4 million ($4.48).

Inside the Headlines

Dycom’s fiscal fourth-quarter contract revenues came in at $780.2 million, down 0.8% year over year. The top line also missed the Zacks Consensus Estimate of $799 million, and came at the lower end of the company’s projected range of $780–$810 million. Extensive deployment of 1-Gigabyte wireline networks by major customers and expanding core market share fuelled top-line growth during the quarter. This was somewhat offset by a near term moderation by another important customer. Organic revenues grew 4.6% year over year.

For the fiscal year, Dycom reported contract revenues of $3.1 billion, up 14.1% year over year. Acquisitions contributed $19.3 million, supplementing the revenue stream.

The company reported non-GAAP adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $118 million for the quarter compared with $126 million a year ago.

Liquidity

As of Jul 29, 2017, Dycom had cash and cash equivalents of $38.6 million compared with $33.8 million as of Jul 30, 2016. The company’s long-term debt was $738.3 million at quarter end, compared with $706.2 million as of Jul 30, 2016.

Guidance

The company issued guidance for first-quarter fiscal 2018, wherein adjusted earnings per share are projected in the range of 81 cents to 96 cents, on revenues within $715–$745 million. The Zacks Consensus Estimate for fiscal first-quarter earnings is currently pegged at 80 cents per share.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the past month as none of them issued any earnings estimate revisions.

VGM Scores

At this time, the 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 second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. 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 than value investors.

Outlook

The stock has a Zacks Rank #5 (Strong Sell). We are looking for a below average return from the stock in the next few months.


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