Summit Materials See Uptick in Shares Despite Lower Earnings Growth
May 17, 2023
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Summit Materials ($NYSE:SUM), a leading producer of construction materials, has seen a surprising uptick in its share prices this week. Despite the fact that its earnings growth has lagged behind the three-year returns for its shareholders, the shares have posted a 3.2% increase. The firm is dedicated to delivering high-quality construction materials to its customers in the residential, commercial, and infrastructure sectors. Summit Materials’ shares have been on a steady climb, even though its earnings growth has not yet caught up with the three-year returns for its shareholders. The company has been focusing on expanding its operations, particularly through investments in new plants and equipment, while continuing to invest in research and development of new products.
While the company may not have immediate returns to show in terms of its share price, it is likely that the long-term investments that it is making will begin to pay off in time. Summit Materials has been able to keep its share prices rising despite its lower earnings growth, thanks to its strong commitment to quality and innovation. The firm has also seen success in capitalizing on the opportunities presented by the increasing demand for construction materials, particularly in the infrastructure and residential sectors. With its long-term investments beginning to bear fruit, Summit Materials may soon see its share prices continue to trend upwards.
Earnings
Despite reporting lower earnings growth, SUMMIT MATERIALS saw an uptick in their shares. In their earning report of FY2023 Q1 ending March 31 2023, SUMMIT MATERIALS earned 435.39M USD in total revenue, and lost 30.8M USD in net income. Compared to the previous year, they experienced a 3.4% increase in their total revenue. Over the course of the last 3 years, SUMMIT MATERIALS’s total revenue increased from 427.84M USD to 435.39M USD.
However, despite this, their shares saw an uptick, indicating that investors remain optimistic about the company’s future prospects.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Summit Materials. More…
| Total Revenues | Net Income | Net Margin |
| 2.43k | 275.63 | 6.0% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Summit Materials. More…
| Operations | Investing | Financing |
| 301.15 | -13.14 | -194.39 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Summit Materials. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 4.21k | 2.23k | 16.56 |
Key Ratios Snapshot
Some of the financial key ratios for Summit Materials are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 2.5% | 6.6% | 18.9% |
| FCF Margin | ROE | ROA |
| 1.2% | 14.4% | 6.8% |
Market Price
Monday proved to be a good day for SUMMIT MATERIALS, the construction materials company, as its stock saw an uptick in shares despite the company reporting lower earnings growth. The stock opened at $31.4 and closed at $32.1, representing a 2.1% increase from the previous closing price of $31.4. This trend is especially noteworthy given that many other companies have seen their stock prices drop due to poor performance in the market. The company’s share price increase is likely due to the fact that SUMMIT MATERIALS’ revenue and operating income has increased year-over-year despite the lower earnings growth. This indicates that investors are confident in the company’s ability to continue to generate revenue and income in the future, regardless of any short-term struggles.
In addition, SUMMIT MATERIALS’ strong track record of delivering on its financial guidance may have played a role in boosting investor confidence. Overall, Monday was a good day for SUMMIT MATERIALS, as it saw its stock price rise despite lower earnings growth. This could be a sign that investors are confident in the company’s future performance, and it will be interesting to see how it performs in the coming weeks and months. Live Quote…
Analysis
At GoodWhale, we have conducted an analysis of SUMMIT MATERIALS‘s fundamentals. Through our analysis, we have determined that SUMMIT MATERIALS is what we classify as an ‘elephant’, meaning it has a high amount of assets after deducting off liabilities. According to our Star Chart, SUMMIT MATERIALS is strong in terms of its asset, growth and profitability, and weak in terms of its dividend. In addition, we found that SUMMIT MATERIALS has a high health score of 8/10 considering its cashflows and debt, which indicates that it is capable to pay off debt and fund future operations. This may be attractive to certain types of investors who are interested in the company’s financial health. More…
Peers
In the construction materials industry, there is intense competition between Summit Materials Inc and its main competitors JK Lakshmi Cement Ltd, Prism Johnson Ltd, and Shree Cement Ltd. All four companies are striving to gain market share and improve their financial performance.
– JK Lakshmi Cement Ltd ($BSE:500380)
JK Lakshmi Cement Ltd is an Indian cement company. The company has a market cap of 62.76B as of 2022 and a return on equity of 18.75%. JK Lakshmi Cement is a part of the JK Organisation, which is one of the largest business groups in India. The company manufactures and markets cement and other construction materials. It has a network of over 6,000 dealers and distributors across India. The company has 11 manufacturing plants in India and a market share of about 4%.
– Prism Johnson Ltd ($BSE:500338)
Prism Johnson Ltd is one of the largest diversified business groups in India with a market cap of 61.99B as of 2022. The company has a Return on Equity of 11.43%. The company has a diversified business portfolio with interests in cement, textile, paper, and chemicals. The company has a strong presence in the Indian market and is one of the leading players in the cement and textile industries.
– Shree Cement Ltd ($BSE:500387)
Shree Cement Ltd. is an Indian cement manufacturing company established in Beawar, Ajmer district, Rajasthan in the year 1979. The company has a market cap of 755.51B as of 2022 and a Return on Equity of 7.65%. The company produces Ordinary Portland Cement, Portland Pozzolana Cement, and Portland Slag Cement. It also provides ready mix concrete and other value-added products and services. The company has a presence in India, the United Arab Emirates, Bahrain, Bangladesh, and Sri Lanka.
Summary
Summit Materials is a construction materials and building products company that has seen a 3.2% increase in its stock price this week. Despite this positive development, the company’s earnings growth is not keeping pace with the three-year average return on investment for its shareholders. Analysts suggest that investors interested in Summit Materials should perform a thorough analysis of the company’s long-term prospects, including its competitive position, management team, financial health, and outlook for the construction sector. Investment decisions should be made based on a careful examination of all potential risks and rewards.
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