Powell Industries, Inc. POWL is scheduled to launch first-quarter fiscal 2025 (ended December 2024) outcomes on Feb. 6, after market shut.
Keep up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The Zacks Consensus Estimate for fiscal first-quarter earnings is pegged at $2.83 per share, which has declined 6.6% prior to now 60 days. The consensus mark implies development of 42.9% from the year-ago precise. The Zacks Consensus Estimate for revenues is pegged at $244.2 million, indicating a 25.9% improve from the year-ago precise.
POWL Earnings Estimate Motion
Picture Supply: Zacks Funding Analysis
Powell has a formidable earnings shock historical past. The corporate’s earnings outpaced the Zacks Consensus Estimate in every of the trailing 4 quarters, the typical shock being 57.6%. Within the final reported quarter, the corporate delivered an earnings shock of 8%.
{The electrical} tools producer’s spectacular efficiency is essentially attributable to its sturdy foothold and enhancing circumstances within the oil and gasoline and petrochemical markets. Additionally, the corporate’s rising presence throughout the info middle and electrical utility sectors, together with a strong backlog, has been a key catalyst behind its development.
Earnings Whispers for POWL Inventory
Our confirmed mannequin doesn’t conclusively predict an earnings beat for Powell this time round. The mix of a optimistic Earnings ESP and a Zacks Rank #1 (Robust Purchase), 2 (Purchase) or 3 (Maintain) will increase the chances of an earnings beat, which isn’t the case right here, as elaborated under.
Earnings ESP: Powell has an Earnings ESP of 0.00% as each the Zacks Consensus Estimate and the Most Correct Estimate are pegged at $2.83. You’ll be able to uncover the most effective shares earlier than they’re reported with our Earnings ESP Filter.
Zacks Rank: POWL presently carries a Zacks Rank of three. You’ll be able to see the complete list of today’s Zacks #1 Rank stocks here.
Powell Industries, Inc. Inventory Worth and EPS Shock
Powell Industries, Inc. price-eps-surprise | Powell Industries, Inc. Quote
Elements That Formed POWL’s Quarterly Efficiency
Powell has been witnessing a number of favorable traits throughout its oil, gasoline and petrochemical finish markets that embody development in vitality transition tasks, comparable to biofuels, carbon seize and hydrogen. Vital mission awards, supported by excessive investments in LNG, associated gasoline processing and petrochemical processes, are anticipated to have pushed its fiscal first-quarter revenues.
Increased demand for electrical energy from knowledge facilities in the USA has additionally been driving the demand for POWL’s merchandise and options. Powell has been strengthening its participation throughout {the electrical} energy worth chain and benefiting from strong momentum in electrical utility and industrial finish markets.
This has led to spectacular development within the backlog degree, which was $1.3 billion whereas exiting the fourth-quarter fiscal 2024 (ended September 2024). It’s value noting that POWL’s new orders consisted of a wholesome quantity of small and medium-sized awards, reflecting its well-balanced portfolio throughout markets. That is prone to have augmented its efficiency within the first-quarter fiscal 2025.
Powell’s facility growth mission on the Houston product manufacturing unit is predicted to have helped it execute its present backlog and notice quantity development within the fiscal first quarter. The expansionary efforts have been enabling the corporate to higher serve its clients with enhanced choices throughout knowledge facilities, hydrogen, biofuels, carbon seize and different transitional vitality markets.
Nevertheless, the corporate has been witnessing escalating prices of gross sales and working bills, that are prone to have weighed on its bottom-line efficiency. It’s value noting that materials prices represented 47% of its revenues in fiscal 2024 and 49% in fiscal 2023. Additionally, the corporate has been witnessing supply-chain constraints for particularly engineered elements, that are anticipated to have inflated prices and delayed the supply of merchandise to its clients.
Given the corporate’s substantial worldwide operations, overseas foreign money headwinds are prone to have marred its margins and profitability.
POWL Inventory Worth Efficiency & Valuation
Powell’s shares have exhibited an uptrend prior to now 12 months, outperforming its friends and the Zacks Manufacturing – Electronics business. POWL’s shares have surged 193.9%, outperforming the business’s and the S&P 500’s development of 10.8% and 24%, respectively. The corporate’s friends Eaton Company plc ETN and Franklin Electrical Co., Inc. FELE have gained 30.4% and three.1% in the identical interval, respectively.
POWL Shares Outperform Business, S&P 500 & Friends
Picture Supply: Zacks Funding Analysis
With a ahead 12-month price-to-earnings of 17.03X, which is under the business common of 24.60X, the inventory presents a doubtlessly engaging valuation for traders. Nevertheless, it’s overvalued in contrast with its peer, EnerSys ENS, which is buying and selling at 9.69X.
Powell Worth-to-Earnings (Ahead 12 Months)
Picture Supply: Zacks Funding Analysis
Funding Thesis
Powell has been capitalizing on the rising alternatives in oil and gasoline and petrochemical finish markets with a complete and diversified product portfolio. Strong momentum throughout knowledge facilities, hydrogen, biofuels, carbon seize and different transitional vitality markets bodes properly for the corporate forward of its fiscal first-quarter earnings.
So as to add to its strengths, the corporate’s sturdy give attention to innovation, sturdy backlog degree and expansionary efforts on the Houston facility have improved its development potential.
Nevertheless, escalating working prices and supply-chain constraints, particularly for engineered elements, are anticipated to have been spoilsports for its margin efficiency within the to-be-reported quarter.
Closing Ideas
Regardless of being attractively valued and having sturdy fundamentals, Powell has been witnessing some near-term challenges.
Buyers ought to monitor the developments pertaining to the inventory carefully for a extra acceptable entry level as an misguided and hasty resolution might have an effect on portfolio positive factors. Due to this fact, it may be prudent to attend for POWL’s earnings report earlier than investing resolution.
Nevertheless, those that already personal this inventory could keep invested as the corporate’s sturdy estimates, sturdy share value returns and power in its companies supply strong long-term prospects.
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Eaton Corporation, PLC (ETN) : Free Stock Analysis Report
Franklin Electric Co., Inc. (FELE) : Free Stock Analysis Report
Enersys (ENS) : Free Stock Analysis Report
Powell Industries, Inc. (POWL) : Free Stock Analysis Report
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