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Dycom Industries (DY) Up 13.5% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Dycom Industries (DY - Free Report) . Shares have added about 13.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Dycom Industries due for a pullback? 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 & Revenues Lag Estimates
Dycom reported tepid results for fourth-quarter fiscal 2024 (ended Jan 27, 2024). Both the top and bottom lines missed their respective Zacks Consensus Estimate.
Contract revenues increased but earnings declined on a year-over-year basis.
Earnings & Revenue Discussion
Dycom reported adjusted earnings per share (EPS) of 79 cents, missing the Zacks Consensus Estimate of 91 cents by 13.2% and declined from 83 cents by 4.8% year over year.
Contract revenues of $952.5 million moved up 3.8% year over year but lagged the consensus mark of $971 million by 2%. Contract revenues decreased 2.5% on an organic basis. Acquisitions contributed $57.5 million to contract revenues.
The company’s top five customers contributed 58.6% to total contract revenues, which declined 13% organically. Revenues from all other customers increased 17.8% organically in the quarter. The quarter marks the 20th consecutive period of organic growth for DY’s all other customers in aggregate, excluding the top five.
Dycom’s largest customer, Lumen, contributed 17.2% to total revenues and rallied 48.9% organically. This marks the eighth consecutive quarter of organic growth with Lumen. AT&T (the second-largest customer) contributed 17.1% to total revenues. Comcast contributed 10.2% and Charter contributed 7.4% of revenues (surged a whopping 124.3% organically). Verizon (the fifth largest customer) represented 6.7% of total revenues.
Fiber construction revenues from electric utilities were $83.7 million.
Operations & Backlog Details
Adjusted EBITDA increased to $93.7 million from $83.1 million reported a year ago. Adjusted EBITDA margin of 9.8% expanded 70 bps from the year-ago level.
Dycom’s backlog at the end of the fiscal fourth quarter totaled $6.917 billion compared with $6.141 billion at fiscal 2023-end. Of the backlog, $3.966 billion is projected to be completed in the next 12 months.
Fiscal 2024 Highlights
The company reported total contract revenues of $4.176 billion, up 9.6% from $3.808 billion at fiscal 2023-end, primarily due to 6.9% organic revenues growth (after adjusting for $102.7 million of contract revenues from an acquired business that was not owned during the prior year).
Adjusted EBITDA margin was 12.1%, up 250 bps from 9.6% in fiscal 2023. Adjusted EPS was $7.37 compared with $4.74 in fiscal 2023.
Financials
As of Jan 27, 2024, Dycom had liquidity of $703.6 million, including cash and cash equivalents worth $101.1 million (compared with $224.2 million on Jan 28, 2023). Long-term debt was $791.4 million at fiscal 2024-end, down from $807.4 million at the end of fiscal 2023.
At the end of fiscal 2024, DY repurchased 260,000 shares of its common stock for $29.4 million at an average price of $112.93 per share.
Fiscal Q1 FY’25 View
For the fiscal first quarter (ending on Apr 27, 2024), DY expects contract revenues to be in line or decline slightly from the first quarter of fiscal 2024 level. It expects $60 million of acquired contract revenues for the quarter.
The adjusted EBITDA margin is expected to increase 25-75 bps from the year-ago levels. For the said period, Dycom expects the effective tax rate to be 26% and diluted shares of 29.5 million. Interest expenses, net, is likely to be $13.2 million and amortization expenses to be $5.5 million.
The company expects organic revenues to grow year over year from the fiscal second quarter.
Capital expenditures, net is anticipated to be in the range of $220-$230 million for fiscal 2025.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
The consensus estimate has shifted 48.3% due to these changes.
VGM Scores
Currently, Dycom Industries has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% 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
Dycom Industries has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Dycom Industries (DY) Up 13.5% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Dycom Industries (DY - Free Report) . Shares have added about 13.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Dycom Industries due for a pullback? 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 & Revenues Lag Estimates
Dycom reported tepid results for fourth-quarter fiscal 2024 (ended Jan 27, 2024). Both the top and bottom lines missed their respective Zacks Consensus Estimate.
Contract revenues increased but earnings declined on a year-over-year basis.
Earnings & Revenue Discussion
Dycom reported adjusted earnings per share (EPS) of 79 cents, missing the Zacks Consensus Estimate of 91 cents by 13.2% and declined from 83 cents by 4.8% year over year.
Contract revenues of $952.5 million moved up 3.8% year over year but lagged the consensus mark of $971 million by 2%. Contract revenues decreased 2.5% on an organic basis. Acquisitions contributed $57.5 million to contract revenues.
The company’s top five customers contributed 58.6% to total contract revenues, which declined 13% organically. Revenues from all other customers increased 17.8% organically in the quarter. The quarter marks the 20th consecutive period of organic growth for DY’s all other customers in aggregate, excluding the top five.
Dycom’s largest customer, Lumen, contributed 17.2% to total revenues and rallied 48.9% organically. This marks the eighth consecutive quarter of organic growth with Lumen. AT&T (the second-largest customer) contributed 17.1% to total revenues. Comcast contributed 10.2% and Charter contributed 7.4% of revenues (surged a whopping 124.3% organically). Verizon (the fifth largest customer) represented 6.7% of total revenues.
Fiber construction revenues from electric utilities were $83.7 million.
Operations & Backlog Details
Adjusted EBITDA increased to $93.7 million from $83.1 million reported a year ago. Adjusted EBITDA margin of 9.8% expanded 70 bps from the year-ago level.
Dycom’s backlog at the end of the fiscal fourth quarter totaled $6.917 billion compared with $6.141 billion at fiscal 2023-end. Of the backlog, $3.966 billion is projected to be completed in the next 12 months.
Fiscal 2024 Highlights
The company reported total contract revenues of $4.176 billion, up 9.6% from $3.808 billion at fiscal 2023-end, primarily due to 6.9% organic revenues growth (after adjusting for $102.7 million of contract revenues from an acquired business that was not owned during the prior year).
Adjusted EBITDA margin was 12.1%, up 250 bps from 9.6% in fiscal 2023. Adjusted EPS was $7.37 compared with $4.74 in fiscal 2023.
Financials
As of Jan 27, 2024, Dycom had liquidity of $703.6 million, including cash and cash equivalents worth $101.1 million (compared with $224.2 million on Jan 28, 2023). Long-term debt was $791.4 million at fiscal 2024-end, down from $807.4 million at the end of fiscal 2023.
At the end of fiscal 2024, DY repurchased 260,000 shares of its common stock for $29.4 million at an average price of $112.93 per share.
Fiscal Q1 FY’25 View
For the fiscal first quarter (ending on Apr 27, 2024), DY expects contract revenues to be in line or decline slightly from the first quarter of fiscal 2024 level. It expects $60 million of acquired contract revenues for the quarter.
The adjusted EBITDA margin is expected to increase 25-75 bps from the year-ago levels. For the said period, Dycom expects the effective tax rate to be 26% and diluted shares of 29.5 million. Interest expenses, net, is likely to be $13.2 million and amortization expenses to be $5.5 million.
The company expects organic revenues to grow year over year from the fiscal second quarter.
Capital expenditures, net is anticipated to be in the range of $220-$230 million for fiscal 2025.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
The consensus estimate has shifted 48.3% due to these changes.
VGM Scores
Currently, Dycom Industries has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% 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
Dycom Industries has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.