Actions of Apogee Enterprises, Inc. (APOG – Free Report) have fallen by about 32% over the past year, which is higher than the industry's 23% loss. This can be attributed to the reduction in volumes due to delays in project completion and inflationary pressures due to tariffs.
Notably, the company's estimated earnings per share for 2019 and 2020 have moved south over the past 30 days, reflecting the bearish sentiment of analysts. For 2019, the estimate went down by 2% to settle at $ 3.13. For 2020, the estimate decreased by 7% to $ 3.59.
What is lowering the stock?
Apogee experienced a decline in revenues and earnings in the Architectural Architecture Systems sector in the third quarter of fiscal 2019, due to reduced volumes due to delays in the project schedule. Apogee expects this short-term impact to also impact the fourth quarter of fiscal year 2019.
For the 2019 fiscal year, Apogee has reduced its revenue growth outlook from 6% to 7% between 6% and 7%, due to a decline in projected revenues in the Architectural Glass and Structural Systems segments architectural. The company also trimmed its earnings per share guidance for the year from $ 3.13 to $ 3.33.
In addition, Apogee revised its operating margin guidance from 8.3 to 8.8% to 8.4%. He has witnessed inflationary pressures and rising freight and lumber costs. In addition, tariffs on aluminum and steel will reduce the margins of the company.
In addition, Apogee's Zacks Rank # 4 (Sell) only reaffirms that he is currently suffering from several headwinds. The unfavorable rank implies that investors must get rid of the shares of their respective portfolios. In fact, stocks with Zacks Rank # 4 or 5 (Strong Sell) may underperform the overall market over the next three months.
Will the stock bounce?
Apogee expects to capitalize on its strategy of growth and business diversification, which will strengthen its operations and profitability. The company's continued focus on project investments will also boost strategic growth and capacity and improve productivity.
With regard to acquisitions, Apogee is focusing primarily on the EFCO integration to recognize margin opportunities. The company is moving forward with synergy goals by leveraging supplier relationships and ensuring on-time deliveries. In addition, he expects the acquisition of Sotawall to generate intense attribution activity, which augurs well for fiscal 2019 and beyond.
We believe these factors will ultimately benefit Apogee's results and influence its share price. However, the stock will remain under pressure due to the headwinds mentioned above for the moment.
Stocks to consider
Axon Enterprise, Inc. (AAXN – Free Report), Alarm.com Holdings, Inc. (ALRM – Free Report) and Brady Corp. (BRC – Free Report) are some of the top ranked stocks in the same industry. While Axon Enterprise has a # 1 Zack Rank (strong buy), Alarm.com and Brady have a Rank # 2 Zacks (Buy). You can see the complete list of current stocks of Zacks # 1.
Axon Enterprise has a long-term earnings growth rate of 25%. The stock has jumped about 80% in one year.
Alarm.com has a long-term profit growth rate of 17%. Its shares have gained 49% in the last year.
Brady has a long-term earnings growth rate of 7.5%. The company's shares have increased by 18% over the last year.
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