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Matrix Service (MTRX - Free Report) is a Zacks Rank #2 (Buy) that has a C for Value and an A for Growth. This is an oil patch play that has been running since the most recent earnings report. Oil is headed to $100 per barrel and maybe higher and that is going to keep investors interested in this sector.Let’s explore more about this company in this Bull of The Day article.
Description
Matrix Service Company, through its subsidiaries, is a North American industrial engineering, construction, and maintenance contractor headquartered in Tulsa, Oklahoma with offices located throughout the United States and Canada, as well as Sydney, Australia and Seoul, South Korea. They report their financial results in three key operating segments: Utility and Power Infrastructure, Process and Industrial Facilities, and Storage and Terminal Solutions.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For Matrix Service, I see two misses sandwiched between two beats over the last year. The important idea is that the most recent quarter was a solid beat. The company posted a loss of 11 cents when a loss of 29 cents was expected. That 18 cent beat translates to a 62% positive earnings surprise.
Earnings Estimates Revisions
This quarter is holding still at a loss of 13 cents.
The Zacks Research System does not have estimates for next quarter and we cannot just plug in a $0.70 number because fiscal year end is in June.
Speaking of that year end number, we have estimates moving from a loss of 7 cents to a gain of 13 cents.
Next fiscal year is calling for EPS of $0.75.
Growth
I am going to lead with the idea of earnings growth here. This fiscal year is looking for 111% growth on the bottom line and that big number is dwarfed by the 476% EPS growth that is projected for next year.
We don’t have revenue estimates, but we can look at the last few quarters of data to see that revenues have moved from $193M to $187M and most recently to $206M.
Over those quarters book to bill has moved from 1.9x to 1.7x and most recently clocked in at 2.3x.
The backlog now stands at $1.1B and that is up 85% on a year over year basis.
Valuation
With the company flipping from running a loss to profitability in the near term, the forward PE is rather high at 85x. If push that forward part out to next fiscal year the forward PE shrinks to 15x.
The price to book is at 1.65x so the value players are going to be liking this stock even after it has run so much.
Price to sales is a disappointingly low 0.38x, but that number could easily double as sales growth ramps.
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Bull Of The Day: Matrix Service (MTRX)
Matrix Service (MTRX - Free Report) is a Zacks Rank #2 (Buy) that has a C for Value and an A for Growth. This is an oil patch play that has been running since the most recent earnings report. Oil is headed to $100 per barrel and maybe higher and that is going to keep investors interested in this sector.Let’s explore more about this company in this Bull of The Day article.
Description
Matrix Service Company, through its subsidiaries, is a North American industrial engineering, construction, and maintenance contractor headquartered in Tulsa, Oklahoma with offices located throughout the United States and Canada, as well as Sydney, Australia and Seoul, South Korea. They report their financial results in three key operating segments: Utility and Power Infrastructure, Process and Industrial Facilities, and Storage and Terminal Solutions.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For Matrix Service, I see two misses sandwiched between two beats over the last year. The important idea is that the most recent quarter was a solid beat. The company posted a loss of 11 cents when a loss of 29 cents was expected. That 18 cent beat translates to a 62% positive earnings surprise.
Earnings Estimates Revisions
This quarter is holding still at a loss of 13 cents.
The Zacks Research System does not have estimates for next quarter and we cannot just plug in a $0.70 number because fiscal year end is in June.
Speaking of that year end number, we have estimates moving from a loss of 7 cents to a gain of 13 cents.
Next fiscal year is calling for EPS of $0.75.
Growth
I am going to lead with the idea of earnings growth here. This fiscal year is looking for 111% growth on the bottom line and that big number is dwarfed by the 476% EPS growth that is projected for next year.
We don’t have revenue estimates, but we can look at the last few quarters of data to see that revenues have moved from $193M to $187M and most recently to $206M.
Over those quarters book to bill has moved from 1.9x to 1.7x and most recently clocked in at 2.3x.
The backlog now stands at $1.1B and that is up 85% on a year over year basis.
Valuation
With the company flipping from running a loss to profitability in the near term, the forward PE is rather high at 85x. If push that forward part out to next fiscal year the forward PE shrinks to 15x.
The price to book is at 1.65x so the value players are going to be liking this stock even after it has run so much.
Price to sales is a disappointingly low 0.38x, but that number could easily double as sales growth ramps.