It has been about a month since the last earnings report for Lamar Advertising (LAMR - Free Report) . Shares have added about 2.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Lamar 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 catalysts.
Lamar’s Q2 FFO & Revenues Miss Estimates
Lamar reported FFO per share of 95 cents for the second quarter, down 38.3% from the prior-year quarter’s $1.54. Moreover, the figure missed the Zacks Consensus Estimate of $1.02.
The company’s second quarter results reflect the adverse impact of the coronavirus pandemic on the company’s business.
Net revenues for the quarter came in at $347.7 million, marking a 22.5% decline from the prior-year quarter. Moreover, the revenue figure missed the Zacks Consensus Estimate of $370.3 million.
The company took measures to boost its liquidity and lower its operating expenses. To cut costs the company granted temporary franchise fee relief and workforce reduction, during the second quarter.
The company revised its guidance for the current year, reflecting the impact of the coronavirus pandemic on its operations.
Quarter in Detail
Acquisition-adjusted net revenues for the second quarter decreased 23.4% year on year to $347.7 million. Also, acquisition-adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) plunged 36.4% to $133.2 million.
Operating income plummeted 54% from the prior-year quarter to $66.5 million, while adjusted EBITDA went down 35.9% to $133.2 million. Additionally, free cash flow of $88.1 million in the June-end quarter dipped 33.7% year over year.
At the end of second-quarter 2020, Lamar Advertising had total liquidity of $1.1 billion. This comprised $737.2 million available for borrowing under its revolving senior credit facility, $171.8 million available under the Accounts Receivable Securitization Program and $177.1 million in cash and cash equivalents.
Lamar Advertising has revised the 2020 guidance to account for the impact of the coronavirus crisis. It now projects 2020 adjusted FFO per share at $4.16-$4.56. The company had earlier estimated the ongoing year’s adjusted FFO per share in the $6.05-$6.20 band.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
At this time, Lamar has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Lamar has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.