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Beacon Roofing (BECN) Surges 71% in the Past Year: Here's Why
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Beacon Roofing Supply, Inc. (BECN - Free Report) shares have surged 70.8% in the past year, outperforming the Zacks Building Products - Retail industry’s 24.9% growth.
This distributor of residential and non-residential roofing materials, and complementary building products is benefiting from the effective implementation of its Ambition 2025 targets and cost-reduction initiatives. Additionally, its focus on strategic acquisitions, along with investments in digital and productivity enhancements, is encouraging for its prospects.
Although the high-cost environment is concerning, the aforementioned tailwinds are aiding Beacon in tackling the negative impacts to a great extent.
The Zacks Consensus Estimate for the company's 2024 earnings has risen to $7.87 per share from $7.84 in the past 30 days. The estimated figure depicts 1.4% growth from the prior year’s reported levels. BECN delivered a trailing four-quarter earnings surprise of 10.3%, on average.
Image Source: Zacks Investment Research
The growth prospects of this current Zacks Rank #3 (Hold) company is further solidified with a VGM Score of A, backed by a Value and Growth Score of A. The positive trend signifies bullish analyst sentiments and robust fundamentals in the near term.
Growth Drivers
Strategic Initiatives: Beacon has been undertaking various strategic initiatives to boost its long-term ambition of growing and enhancing customer experience, expanding the top line and margin accompanied by boosting value for customers, suppliers, employees and shareholders.
Currently, the company is concentrating on achieving its Ambition 2025 targets, which were announced on Feb 24, 2022. 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 to 11% EBITDA margins (up 100 basis points from 2021). As part of achieving its Ambition 2025 targets, BECN has been focusing on business expansion through new brand locations and Greenfields. In 2023, the company opened 28 new branch locations and added 11 Greenfields during the fourth quarter of 2023.
Also, the company is focused on driving operational excellence and expanding capacity through continuous improvement and productivity initiatives. BECN added approximately $15 million to the bottom line year over year in the fourth quarter of 2023 through these initiatives.
Accretive Buyouts: Apart from focusing on organic moves to expand its business and boost its growth prospects, Beacon also engages in bolt-on acquisitions and divestitures. In the first three months of 2024, the company expanded its footprint by opening three new locations and completing two acquisitions
Furthermore, in 2023, BECN acquired nine companies, totaling 21 branches across new markets and capabilities. The acquisition portfolio is performing well and contributed approximately $370 million to net sales for the year. This expands the company’s ability to serve customers nationwide, complementing its Greenfield strategy.
Productivity & Digital Enhancements: BECN remains focused on making accretive investments on productivity and digital initiatives. In terms of productivity, the company is investing in its employees with additional tools and training, which in turn will foster its product breadth and depth.
It also drives growth and enhances margins through its digital initiatives. During the fourth quarter of 2023, sales through its online platform delivered approximately 150 basis points better margins than offline channels, driven by strong digital capability. The digital integration with Acculynx — a leading provider of all-in-one business management software for roofing contractors — resulted in a 28% year-over-year surge in digital sales during the same quarter. The comprehensive digital offering gives the company a competitive advantage and its ongoing efforts to enhance these capabilities reflect its commitment to delivering maximum value to customers.
Key Picks
Here are some better-ranked stocks from the Zacks Retail-Wholesale sector.
It has a trailing four-quarter earnings surprise of 32.1%, on average. The stock has surged 105.2% in the past year. The Zacks Consensus Estimate for DECK’s fiscal 2025 sales and earnings per share (EPS) suggests an increase of 10.9% and 10.8%, respectively, from the year-ago period’s levels.
Abercrombie & Fitch Co. (ANF - Free Report) currently flaunts a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 715.6%, on average. The stock has surged 372.6% in the past year.
The Zacks Consensus Estimate for ANF’s fiscal 2024 sales and EPS suggests a growth of 5.6% and 19.1%, respectively, from the year-ago period’s levels.
Burlington Stores, Inc. (BURL - Free Report) sports a Zacks Rank of 1 at present. It has a trailing four-quarter earnings surprise of 10.1%, on average. The stock has increased 11.1% in the past year.
The Zacks Consensus Estimate for BURL’s fiscal 2024 sales and EPS indicates a 10.2% and a 22.3% rise, respectively, from the year-ago period’s levels.
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Beacon Roofing (BECN) Surges 71% in the Past Year: Here's Why
Beacon Roofing Supply, Inc. (BECN - Free Report) shares have surged 70.8% in the past year, outperforming the Zacks Building Products - Retail industry’s 24.9% growth.
This distributor of residential and non-residential roofing materials, and complementary building products is benefiting from the effective implementation of its Ambition 2025 targets and cost-reduction initiatives. Additionally, its focus on strategic acquisitions, along with investments in digital and productivity enhancements, is encouraging for its prospects.
Although the high-cost environment is concerning, the aforementioned tailwinds are aiding Beacon in tackling the negative impacts to a great extent.
The Zacks Consensus Estimate for the company's 2024 earnings has risen to $7.87 per share from $7.84 in the past 30 days. The estimated figure depicts 1.4% growth from the prior year’s reported levels. BECN delivered a trailing four-quarter earnings surprise of 10.3%, on average.
Image Source: Zacks Investment Research
The growth prospects of this current Zacks Rank #3 (Hold) company is further solidified with a VGM Score of A, backed by a Value and Growth Score of A. The positive trend signifies bullish analyst sentiments and robust fundamentals in the near term.
Growth Drivers
Strategic Initiatives: Beacon has been undertaking various strategic initiatives to boost its long-term ambition of growing and enhancing customer experience, expanding the top line and margin accompanied by boosting value for customers, suppliers, employees and shareholders.
Currently, the company is concentrating on achieving its Ambition 2025 targets, which were announced on Feb 24, 2022. 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 to 11% EBITDA margins (up 100 basis points from 2021). As part of achieving its Ambition 2025 targets, BECN has been focusing on business expansion through new brand locations and Greenfields. In 2023, the company opened 28 new branch locations and added 11 Greenfields during the fourth quarter of 2023.
Also, the company is focused on driving operational excellence and expanding capacity through continuous improvement and productivity initiatives. BECN added approximately $15 million to the bottom line year over year in the fourth quarter of 2023 through these initiatives.
Accretive Buyouts: Apart from focusing on organic moves to expand its business and boost its growth prospects, Beacon also engages in bolt-on acquisitions and divestitures. In the first three months of 2024, the company expanded its footprint by opening three new locations and completing two acquisitions
Furthermore, in 2023, BECN acquired nine companies, totaling 21 branches across new markets and capabilities. The acquisition portfolio is performing well and contributed approximately $370 million to net sales for the year. This expands the company’s ability to serve customers nationwide, complementing its Greenfield strategy.
Productivity & Digital Enhancements: BECN remains focused on making accretive investments on productivity and digital initiatives. In terms of productivity, the company is investing in its employees with additional tools and training, which in turn will foster its product breadth and depth.
It also drives growth and enhances margins through its digital initiatives. During the fourth quarter of 2023, sales through its online platform delivered approximately 150 basis points better margins than offline channels, driven by strong digital capability. The digital integration with Acculynx — a leading provider of all-in-one business management software for roofing contractors — resulted in a 28% year-over-year surge in digital sales during the same quarter. The comprehensive digital offering gives the company a competitive advantage and its ongoing efforts to enhance these capabilities reflect its commitment to delivering maximum value to customers.
Key Picks
Here are some better-ranked stocks from the Zacks Retail-Wholesale sector.
Deckers Outdoor Corporation (DECK - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
It has a trailing four-quarter earnings surprise of 32.1%, on average. The stock has surged 105.2% in the past year. The Zacks Consensus Estimate for DECK’s fiscal 2025 sales and earnings per share (EPS) suggests an increase of 10.9% and 10.8%, respectively, from the year-ago period’s levels.
Abercrombie & Fitch Co. (ANF - Free Report) currently flaunts a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 715.6%, on average. The stock has surged 372.6% in the past year.
The Zacks Consensus Estimate for ANF’s fiscal 2024 sales and EPS suggests a growth of 5.6% and 19.1%, respectively, from the year-ago period’s levels.
Burlington Stores, Inc. (BURL - Free Report) sports a Zacks Rank of 1 at present. It has a trailing four-quarter earnings surprise of 10.1%, on average. The stock has increased 11.1% in the past year.
The Zacks Consensus Estimate for BURL’s fiscal 2024 sales and EPS indicates a 10.2% and a 22.3% rise, respectively, from the year-ago period’s levels.