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L.B. Foster (FSTR) Shares Up 57% in 6 Months: Here's Why
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L.B. Foster Company (FSTR - Free Report) shares have rallied 57.4% in the last six months. The rally has resulted in the stock outperforming its industry’s rise of 11.2% over the same time frame. The company also topped the S&P 500’s roughly 13.3% rise over the same period.
Image Source: Zacks Investment Research
Let’s examine the factors driving this Zacks Rank #2 (Buy) stock.
What’s Going in L.B. Foster’s Favor?
FSTR's second-quarter results exceeded expectations, with earnings per share surging to 32 cents, up from the prior year's 18 cents, surpassing the Zacks Consensus Estimate of 28 cents. The company also reported robust revenue growth, achieving a 12.5% year-over-year increase to $148 million, exceeding the consensus estimate of $140.7 million.
New orders for the quarter reached an impressive $183.7 million, reflecting a substantial 30% year-over-year increase. This exceptional performance can be attributed to heightened demand, higher pricing, a favorable product mix and ongoing transformation initiatives. FSTR revised its 2023 financial outlook, projecting adjusted EBITDA to range from $28 million to $32 million, up from the initial guidance of $27-$31 million.
In the Rail, Technologies, and Services segment, sales witnessed a 12% year-over-year increase, reaching $91.6 million in the second quarter. Simultaneously, the Precast Concrete Products Segment reported sales of $33.9 million, indicating a remarkable 43.4% year-over-year increase, driven by 12.8% organic growth and a 30.6% contribution from acquiring VanHooseCo Precast, LLC.
The Zacks Consensus Estimate for full-year 2023 earnings is pegged at 53 cents per share, indicating a remarkable year-over-year growth of 112.5%. In 2024, earnings are expected to witness an impressive 117% growth. Additionally, FSTR has demonstrated a consistent track record of exceeding the Zacks Consensus Estimate in each of the past four quarters, boasting an impressive trailing four-quarter average earnings surprise of 134.5%.
The earnings estimate for Carpenter Technology’s current year is pegged at $3.48, indicating a year-over-year growth of 205%. CRS beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 10%. The company’s shares have rallied 96% in the past year.
The consensus estimate for Akzo Nobel’s current-year earnings is pegged at $1.44, indicating a year-over-year growth of 67.4%. In the past 60 days, AKZOY’s current-year earnings estimate has been revised upward by 3.6%. The company’s shares have rallied 28.5% in the past year.
The earnings estimate for Alamos’ current year is pegged at 43 cents, indicating a year-over-year growth of 53.6%. The Zacks Consensus Estimate for AGI current-year earnings has been revised 7.5% upward in the past 60 days. The company’s shares have risen roughly 78.8% in the past year.
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L.B. Foster (FSTR) Shares Up 57% in 6 Months: Here's Why
L.B. Foster Company (FSTR - Free Report) shares have rallied 57.4% in the last six months. The rally has resulted in the stock outperforming its industry’s rise of 11.2% over the same time frame. The company also topped the S&P 500’s roughly 13.3% rise over the same period.
Image Source: Zacks Investment Research
Let’s examine the factors driving this Zacks Rank #2 (Buy) stock.
What’s Going in L.B. Foster’s Favor?
FSTR's second-quarter results exceeded expectations, with earnings per share surging to 32 cents, up from the prior year's 18 cents, surpassing the Zacks Consensus Estimate of 28 cents. The company also reported robust revenue growth, achieving a 12.5% year-over-year increase to $148 million, exceeding the consensus estimate of $140.7 million.
New orders for the quarter reached an impressive $183.7 million, reflecting a substantial 30% year-over-year increase. This exceptional performance can be attributed to heightened demand, higher pricing, a favorable product mix and ongoing transformation initiatives. FSTR revised its 2023 financial outlook, projecting adjusted EBITDA to range from $28 million to $32 million, up from the initial guidance of $27-$31 million.
In the Rail, Technologies, and Services segment, sales witnessed a 12% year-over-year increase, reaching $91.6 million in the second quarter. Simultaneously, the Precast Concrete Products Segment reported sales of $33.9 million, indicating a remarkable 43.4% year-over-year increase, driven by 12.8% organic growth and a 30.6% contribution from acquiring VanHooseCo Precast, LLC.
The Zacks Consensus Estimate for full-year 2023 earnings is pegged at 53 cents per share, indicating a remarkable year-over-year growth of 112.5%. In 2024, earnings are expected to witness an impressive 117% growth. Additionally, FSTR has demonstrated a consistent track record of exceeding the Zacks Consensus Estimate in each of the past four quarters, boasting an impressive trailing four-quarter average earnings surprise of 134.5%.
L.B. Foster Company Price and Consensus
L.B. Foster Company price-consensus-chart | L.B. Foster Company Quote
Zacks Rank & Other Key Picks
Some other top-ranked stocks in the Basic Materials space are Carpenter Technology Corporation (CRS - Free Report) and Akzo Nobel N.V. (AKZOY - Free Report) , both sporting a Zacks Rank #1 (Strong Buy), and Alamos Gold Inc. (AGI - Free Report) , carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The earnings estimate for Carpenter Technology’s current year is pegged at $3.48, indicating a year-over-year growth of 205%. CRS beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 10%. The company’s shares have rallied 96% in the past year.
The consensus estimate for Akzo Nobel’s current-year earnings is pegged at $1.44, indicating a year-over-year growth of 67.4%. In the past 60 days, AKZOY’s current-year earnings estimate has been revised upward by 3.6%. The company’s shares have rallied 28.5% in the past year.
The earnings estimate for Alamos’ current year is pegged at 43 cents, indicating a year-over-year growth of 53.6%. The Zacks Consensus Estimate for AGI current-year earnings has been revised 7.5% upward in the past 60 days. The company’s shares have risen roughly 78.8% in the past year.