A month has gone by since the last earnings report for Outfront Media (OUT Quick QuoteOUT - Free Report) . Shares have lost about 16.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Outfront Media due for a breakout? 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.

OUTFRONT Media Misses Q4 FFO Mark on Higher Expenses

OUTFRONT Media reported fourth-quarter adjusted FFO (AFFO) per share of 56 cents, missing the Zacks Consensus Estimate of 64 cents. The figure was also lower than the prior-year quarter’s tally of 65 cents. Results reflect higher operating expenses and interest expenses in the quarter.

However, quarterly revenues of $494.7 million matched the Zacks Consensus Estimate and climbed 6.5% year over year. Higher billboard revenues, and transit and other revenues attributed to this increase.

For the full-year 2022, the AFFO per share came in at $1.92, higher than the prior-year tally of $1.40 but missed the Zacks Consensus Estimate of $2.03. The year-over-year increase was backed by 21.1% growth in revenues to $1.77 billion.

Quarter in Detail

During the reported quarter, billboard revenues were $377.5 million, marking year-over-year growth of 6.6%. The upside resulted from higher average revenues per display (referred to as yield) compared with the prior-year quarter.

The company’s transit and other revenues of $117.2 million climbed 6.1% from the year-ago quarter. The upswing mainly resulted from the increase in yield compared with the prior-year period.

OUTFRONT Media’s operating income totaled $105.0 million in the fourth quarter, narrowly missing the year-ago quarter’s $105.2 million.

Operating expenses were $239.5 million, up 10.4% year over year. The rise was primarily due to higher variable costs related to higher billboard revenues and increased transit franchise expenses.

Net interest expenses of $35.9 million increased from $31.9 million in the same prior-year period, mainly due to higher interest rates compared to the same prior-year quarter. The weighted average cost of debt on Dec 31, 2022 was 5.2% compared to 4.3% in the prior-year period.

Cash Flow & Balance Sheet

Net cash flow provided by operating activities for the year ended Dec 31, 2022 was $254.1 million compared with $98.8 million during the same prior-year period, mainly because of higher net income.

As of Dec 31, 2022, OUTFRONT Media’s liquidity position comprised unrestricted cash of $40.4 million and $493.6 million of availability under its $500-million revolving credit facility, net of $6.4 million of issued letters of credit.

In the quarter under review, the company sold no shares of its common stock under its at-the-market (ATM) equity program. It had $232.5 million available under the ATM program at the quarter’s end.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -41.5% due to these changes.

VGM Scores

Currently, Outfront Media has an average Growth Score of C, though it is lagging a lot on the Momentum Score 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Outfront Media has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.