Shares of NCI Building Systems Inc. (NYSE:NCS) have gained around 35% in the last three months. The company has also significantly outperformed its industry’s growth of 11%.
NCI Building Systems has a market cap of roughly $1.28 billion. Average volume of shares traded in the last three months is around 612.5K.
The company has an impressive earnings surprise history beating the Zacks Consensus Estimate in three of the trailing four quarters, with an average positive surprise of 9.74%.
Let’s take a look into the factors that are driving this Zacks Rank #3 (Hold) stock.
Driving Factors
NCI Building Systems recently reported adjusted earnings of 32 cents per share for fourth-quarter fiscal 2017 (ended Oct 29, 2017), up 14% from 28 cents recorded in the prior-year quarter. Earnings beat the Zacks Consensus Estimate of 31 cents despite the negative impact of job site disruptions, uneven production flow and increased transportation costs related to the various hurricanes.
For first-quarter fiscal 2018, NCI Building Systems estimates revenues to be in the range of $390-$410 million and adjusted EBITDA to be in the $24-$34 million range. It expects gross margins to improve in fiscal 2018 year due to improvements in cost structure. The company remains confident that fiscal 2018 will be a better year than fiscal 2017. It is poised to gain from success in leveraging IMP (insulated metal panel) product sales to the Components and Building groups. It projects business to improve over the next 12 to 18 months.
NCI Building Systems expects low-rise non-residential construction starts in fiscal 2018 to grow in mid-single digits, with the adjustable markets for legacy businesses projected to be up in the range of 2-4%. The company’s IMP product lines are anticipated to continue growing at a low-double digit rate based on solid underlying demand.
The company is well poised for long-term growth on the back of rising demand for key products and strategic actions. The company is focused on investments in automation and process innovation which will slash operating costs, improve margins, quality and service, and enhance long-term operational flexibility. It will also focus on continued improvement in manufacturing, and delivering cost reductions with the Lean and Six Sigma initiatives across the entire business. The step will reduce excess operational back-office costs and simplify the business. Finally, NCI Building Systems’ focus on growth strategy around IMP and its ability to drive adjacent products across the engines of legacy distribution channels will support the company’s performance.
NCI Building Systems, Inc. Price and Consensus
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