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American Woodmark Q1 Preview: Can Shares Find New Life?

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The Zacks Consumer Discretionary Sector has been hit harder than most in 2022, down nearly 30%. Even over the last month, the sector’s 2.3% gain has lagged behind the S&P 500. Facing record-high inflation, consumers have heavily pulled back their spending on non-essential items.

One company residing in the sector, American Woodmark (AMWD - Free Report) , is on deck to unveil Q1 results on August 30th before market open.

Offering more than 340 cabinet lines in various designs, materials, and finishes, American Woodmark products are sold through a network of dealers and distributors and directly to home centers and major homebuilders.

Currently, the company carries a Zacks Rank #5 (Strong Sell) with an overall VGM Score of a B. How does everything shape up for the company heading into the print? Let’s take a closer look.

Share Performance & Valuation

Year-to-date, it’s been a challenging road for American Woodmark shares, losing more than a fourth in value and widely underperforming the S&P 500.

Zacks Investment Research
Image Source: Zacks Investment Research

Over the last month, AMWD shares have lagged behind the S&P 500’s 3% gain, tacking on a marginal 0.5% in value.

Zacks Investment Research
Image Source: Zacks Investment Research

However, AMWD shares trade at enticing valuation multiples, further displayed by its Style Score of a B for Value. The company’s 9.9X forward earnings multiple is well beneath its five-year median of 13.4X and represents a sizable 54% discount relative to its Zacks Sector.

Zacks Investment Research
Image Source: Zacks Investment Research

Quarterly Estimates

A singular analyst has upped their earnings outlook for the quarter over the last 60 days, with the Consensus Estimate Trend increasing a marginal 1.5%. The Zacks Consensus EPS Estimate of $1.31 reflects a massive 87% Y/Y uptick in quarterly earnings.

Zacks Investment Research
Image Source: Zacks Investment Research

The company’s top-line is in exceptional health as well – American Woodmark is forecasted to have generated $514 million in revenue throughout the quarter, penciling in a stellar 16% year-over-year uptick.

Quarterly Performance & Market Reactions

The company’s bottom-line results have left much to be desired, with the company exceeding the Zacks Consensus EPS Estimate in just two of its previous ten quarters. However, the company recorded a 3% bottom-line beat in its latest print.

Top-line results have repeatedly come in below expectations as well, with AMWD registering just four revenue beats over its last ten quarters. Below is a chart illustrating the company’s revenue on a quarterly basis.

Zacks Investment Research
Image Source: Zacks Investment Research

Still, the market has reacted favorably as of late in response to the company’s quarterly results, with shares moving upwards in back-to-back releases following the print.

Putting Everything Together

American Woodmark shares have lagged the general market over several timeframes, indicating that sellers have been in control.

The company’s shares trade at solid valuation levels, with its forward P/E ratio sitting nicely below its five-year median and Zacks Sector average.

A singular analyst has upped their earnings outlook, and estimates reflect serious revenue and earnings growth.

In addition, the company has repeatedly missed quarterly estimates, but the market has had positive reactions following its latest two releases.

Heading into the print, American Woodmark (AMWD - Free Report) carries a Zacks Rank #5 (Strong Sell) with an overall VGM Score of a B.


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