We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Dycom Industries (DY) Down 5.4% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
It has been about a month since the last earnings report for Dycom Industries (DY - Free Report) . Shares have lost about 5.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Dycom Industries due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Dycom's Q4 Earnings & Revenue Beat Estimates
Dycom Industries Inc. reported solid results for fourth-quarter fiscal 2023 (ended Jan 28, 2023). The top and bottom lines surpassed their respective Zacks Consensus Estimate and increased on a year-over-year basis. The upside was mainly backed by solid organic growth of the top five customers.
Earnings & Revenue Discussion
Dycom’s adjusted earnings of 83 cents per share surpassed the Zacks Consensus Estimate of 17 cents by 388.2%. The quarterly earnings increased from the year-ago adjusted figure of 2 cents per share. The uptrend was driven by higher sales, solid adjusted EBITDA and lower depreciation and amortization costs.
Contract revenues of $917.5 million increased 20.5% year over year and topped the consensus mark of $817 million by 12.3%. Organically, contract revenues increased 20.5%. With the deployment of gigabit wireline networks, wireless/wireline converged networks and wireless networks, the company witnessed an increase in demand from four of its top five customers.
The company’s top five customers represented 65.8% of total contract revenues, which rose 24.4% organically. Revenues from all other customers increased 13.6% organically in the quarter. The quarter marks the 16th consecutive period of organic growth for DY’s all other customers in aggregate, excluding the top five.
Dycom’s largest customer AT&T (contributing 22.5% to total revenues), advanced 1.9% on an organic basis. This marked its eighth consecutive quarter of organic growth. Lumen (the second-largest customer) contributed 12% to total revenues and grew 64.6% organically. Comcast contributed 10.8%, while Frontier and Verizon represented 10.6% and 9.9% of total revenues, respectively. Frontier and Verizon rose 152.8% and 17.6% organically, respectively.
Fiber construction revenues from electric utilities increased 30.4% year over year, organically, and contributed 8.2% to total contract revenues in the quarter.
Dycom’s backlog at the end of the fiscal fourth quarter totaled $6.141 billion compared with $6.116 billion at the third quarter of fiscal 2023-end. Of the backlog, $3.459 billion is projected to be completed in the next 12 months.
Operating Highlights
Depreciation and amortization expenses of $36.7 million were down 1.6% year over year. General and administrative expenses of $72 million increased 12.8% year over year.
Adjusted EBITDA was $83.1 million during the quarter, up 91.9% year over year. Adjusted EBITDA margin of 9.1% expanded 340 bps from the year-ago level.
Financials
As of Jan 28, 2023, Dycom had liquidity of $757.8 million, including cash and cash equivalents worth $224.2 million (compared with $310.8 million on Jan 29, 2022). Long-term debt was $807.4 million at the end of fiscal 2023, down from $823.3 million at the fiscal 2022-end.
Fiscal Q1 2024 Guidance
For the fiscal first quarter (ending Apr 29, 2023), management expects contract revenues to grow in mid-to-high-single digits from the year-ago reported figure. The adjusted EBITDA margin is expected to increase modestly from the year-ago levels. For the period, Dycom expects the effective tax rate to be 26% and diluted shares of 29.8 million. Interest expense is likely to be $10.6 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, Dycom Industries has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Dycom Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Dycom Industries (DY) Down 5.4% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Dycom Industries (DY - Free Report) . Shares have lost about 5.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Dycom Industries due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Dycom's Q4 Earnings & Revenue Beat Estimates
Dycom Industries Inc. reported solid results for fourth-quarter fiscal 2023 (ended Jan 28, 2023). The top and bottom lines surpassed their respective Zacks Consensus Estimate and increased on a year-over-year basis. The upside was mainly backed by solid organic growth of the top five customers.
Earnings & Revenue Discussion
Dycom’s adjusted earnings of 83 cents per share surpassed the Zacks Consensus Estimate of 17 cents by 388.2%. The quarterly earnings increased from the year-ago adjusted figure of 2 cents per share. The uptrend was driven by higher sales, solid adjusted EBITDA and lower depreciation and amortization costs.
Contract revenues of $917.5 million increased 20.5% year over year and topped the consensus mark of $817 million by 12.3%. Organically, contract revenues increased 20.5%. With the deployment of gigabit wireline networks, wireless/wireline converged networks and wireless networks, the company witnessed an increase in demand from four of its top five customers.
The company’s top five customers represented 65.8% of total contract revenues, which rose 24.4% organically. Revenues from all other customers increased 13.6% organically in the quarter. The quarter marks the 16th consecutive period of organic growth for DY’s all other customers in aggregate, excluding the top five.
Dycom’s largest customer AT&T (contributing 22.5% to total revenues), advanced 1.9% on an organic basis. This marked its eighth consecutive quarter of organic growth. Lumen (the second-largest customer) contributed 12% to total revenues and grew 64.6% organically. Comcast contributed 10.8%, while Frontier and Verizon represented 10.6% and 9.9% of total revenues, respectively. Frontier and Verizon rose 152.8% and 17.6% organically, respectively.
Fiber construction revenues from electric utilities increased 30.4% year over year, organically, and contributed 8.2% to total contract revenues in the quarter.
Dycom’s backlog at the end of the fiscal fourth quarter totaled $6.141 billion compared with $6.116 billion at the third quarter of fiscal 2023-end. Of the backlog, $3.459 billion is projected to be completed in the next 12 months.
Operating Highlights
Depreciation and amortization expenses of $36.7 million were down 1.6% year over year. General and administrative expenses of $72 million increased 12.8% year over year.
Adjusted EBITDA was $83.1 million during the quarter, up 91.9% year over year. Adjusted EBITDA margin of 9.1% expanded 340 bps from the year-ago level.
Financials
As of Jan 28, 2023, Dycom had liquidity of $757.8 million, including cash and cash equivalents worth $224.2 million (compared with $310.8 million on Jan 29, 2022). Long-term debt was $807.4 million at the end of fiscal 2023, down from $823.3 million at the fiscal 2022-end.
Fiscal Q1 2024 Guidance
For the fiscal first quarter (ending Apr 29, 2023), management expects contract revenues to grow in mid-to-high-single digits from the year-ago reported figure. The adjusted EBITDA margin is expected to increase modestly from the year-ago levels. For the period, Dycom expects the effective tax rate to be 26% and diluted shares of 29.8 million. Interest expense is likely to be $10.6 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, Dycom Industries has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Dycom Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.