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Beacon (BECN) Expands in 5 Locations With Crossroads Buyout
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In line with its Ambition 2025 investment strategy, Beacon Roofing Supply, Inc. (BECN - Free Report) acquired Crossroads Roofing Supply, Inc., an Oklahoma City, OK-based business.
Crossroads’ Enid, Norman, Oklahoma City, Stillwater and Tulsa branches have been serving residential and commercial contractors for more than 20 years.
Shares of Beacon — the largest distributor of residential and non-residential roofing materials in the United States and Canada — have gained 42.1% in the past three months compared with the industry's 7.9% growth.
Image Source: Zacks Investment Research
Strategic Efforts: a Boon
Beacon has undertaken several strategic initiatives to drive its long-term ambition of growing and enhancing customers’ experiences, expanding its top line and margin and boosting value for customers, suppliers, employees and shareholders.
The company has been focusing on its Ambition 2025 targets (announced on Feb 24, 2022), which emphasize operational excellence, an above-market growth trajectory and accelerated stockholder value creation. The financial targets of Ambition 2025 assume that sales will reach $9 billion (8% CAGR) and $1 billion of EBITDA (10% CAGR), which would translate into 11% EBITDA margin (up 100 basis points from 2021).
As part of this initiative, Beacon has been focusing on business expansion through bolt-on acquisitions and divestitures. So far, in 2023, the company has expanded its branch footprint through the completion of five acquisitions and the opening of 14 new locations.
A solid residential backdrop, exceptional operating cost management and cash flow, a focus on the e-commerce platform, a new OTC (On-Time and Complete) Delivery Network and a newly designed website will drive growth.
Some other top-ranked stocks in the Retail-Wholesale sector include:
Dave & Buster's Entertainment, Inc. (PLAY - Free Report) sports a Zacks Rank #1. PLAY has a trailing four-quarter earnings surprise of 6.8%, on average. Shares of PLAY have gained 43.8% in the past year.
The Zacks Consensus Estimate for PLAY’s 2023 sales and earnings per share (EPS) indicates a rise of 16.9% and 28%, respectively, from the year-ago period’s levels.
Arcos Dorados Holdings Inc. (ARCO - Free Report) carries a Zacks Rank #2 (Buy). ARCO has a long-term earnings growth rate of 9.5%. The stock has rallied 69.7% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests growth of 13.4% and 4.4%, respectively, from the year-ago period’s levels.
Chuy's Holdings, Inc. (CHUY - Free Report) carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 23.4%, on average. Shares of CHUY have skyrocketed 97.9% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings’ 2023 sales and EPS suggests growth of 9.9% and 27.7%, respectively, from the year-ago period’s levels.
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Beacon (BECN) Expands in 5 Locations With Crossroads Buyout
In line with its Ambition 2025 investment strategy, Beacon Roofing Supply, Inc. (BECN - Free Report) acquired Crossroads Roofing Supply, Inc., an Oklahoma City, OK-based business.
Crossroads’ Enid, Norman, Oklahoma City, Stillwater and Tulsa branches have been serving residential and commercial contractors for more than 20 years.
Shares of Beacon — the largest distributor of residential and non-residential roofing materials in the United States and Canada — have gained 42.1% in the past three months compared with the industry's 7.9% growth.
Image Source: Zacks Investment Research
Strategic Efforts: a Boon
Beacon has undertaken several strategic initiatives to drive its long-term ambition of growing and enhancing customers’ experiences, expanding its top line and margin and boosting value for customers, suppliers, employees and shareholders.
The company has been focusing on its Ambition 2025 targets (announced on Feb 24, 2022), which emphasize operational excellence, an above-market growth trajectory and accelerated stockholder value creation. The financial targets of Ambition 2025 assume that sales will reach $9 billion (8% CAGR) and $1 billion of EBITDA (10% CAGR), which would translate into 11% EBITDA margin (up 100 basis points from 2021).
As part of this initiative, Beacon has been focusing on business expansion through bolt-on acquisitions and divestitures. So far, in 2023, the company has expanded its branch footprint through the completion of five acquisitions and the opening of 14 new locations.
A solid residential backdrop, exceptional operating cost management and cash flow, a focus on the e-commerce platform, a new OTC (On-Time and Complete) Delivery Network and a newly designed website will drive growth.
Zacks Rank & Key Picks
Beacon currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some other top-ranked stocks in the Retail-Wholesale sector include:
Dave & Buster's Entertainment, Inc. (PLAY - Free Report) sports a Zacks Rank #1. PLAY has a trailing four-quarter earnings surprise of 6.8%, on average. Shares of PLAY have gained 43.8% in the past year.
The Zacks Consensus Estimate for PLAY’s 2023 sales and earnings per share (EPS) indicates a rise of 16.9% and 28%, respectively, from the year-ago period’s levels.
Arcos Dorados Holdings Inc. (ARCO - Free Report) carries a Zacks Rank #2 (Buy). ARCO has a long-term earnings growth rate of 9.5%. The stock has rallied 69.7% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests growth of 13.4% and 4.4%, respectively, from the year-ago period’s levels.
Chuy's Holdings, Inc. (CHUY - Free Report) carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 23.4%, on average. Shares of CHUY have skyrocketed 97.9% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings’ 2023 sales and EPS suggests growth of 9.9% and 27.7%, respectively, from the year-ago period’s levels.