SPH Intrinsic Value Calculation – Suburban Propane Partners LP Earnings Outperform Expectations Despite Revenue Shortfall

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Suburban Propane Partners ($NYSE:SPH) LP (SUBURBAN PROPANE PARTNERS) is a marketer and distributor of propane, fuel oil, and related products and services throughout the United States. It also has a presence in Canada. Despite a revenue shortfall in the fourth quarter, Suburban Propane Partners LP delivered earnings that outperformed expectations by $0.12. The company’s total revenue for the fourth quarter was lower than anticipated due to weak customer demand and a decrease in residential customer volumes.

However, Suburban Propane Partners LP was able to make up the difference in revenue with higher gross margin and cost control efforts. The fourth quarter earnings were also boosted by a strong performance from its commercial and industrial segment. Suburban Propane Partners LP’s strong fourth quarter earnings were driven by its cost control initiatives and prudent management of its day-to-day operations. The company was able to reduce its operating expenses, while also increasing its gross margin. Despite the revenue shortfall, the company still managed to post impressive earnings per share that exceeded expectations. The company’s cost cutting efforts and success in managing its day-to-day operations allowed it to make up the difference and deliver better than expected results.

Earnings

In its earning report of FY2023 Q3 ending June 30 2021, Suburban Propane Partners LP (Suburban Propane) earned 238.08M USD in total revenue, however, it suffered a net income loss of 26.02M USD. Compared to the same period in the previous year, total revenue fell by an alarming 20.7%. Despite this decrease, Suburban Propane’s total revenue has grown from 238.08M USD to 278.63M USD in the last 3 years, outperforming market expectations. Despite the revenue shortfall, Suburban Propane’s earnings were able to exceed expectations, illustrating the company’s strong financial and operational performance.

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for SPH. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for SPH. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for SPH. More…

Key Ratios Snapshot

Some of the financial key ratios for SPH are shown below. More…

Price History

The company’s stock opened at $16.5 and closed at $16.8, up by 2.0% from its previous closing price of 16.5. This exceeded the expectations of investors and illustrated the company’s strong performance. Despite missing the mark on its revenue estimates, the company’s earnings still outpaced expectations due to cost-cutting efforts and higher gross margins.

However, the company noted that it had benefited from strong demand for propane from its commercial and industrial customers. This is a positive sign for investors and shows that the company is able to remain profitable in challenging times. Live Quote…

Analysis – SPH Intrinsic Value Calculation

At GoodWhale, we have conducted an analysis on the wellbeing of SUBURBAN PROPANE PARTNERS. Our proprietary Valuation Line has revealed the intrinsic value of SUBURBAN PROPANE PARTNERS share to be around $15.7. However, the current market price of the stock is $16.8, which implies that the price is currently overvalued by 7.1%. Therefore, it may not be a good idea to invest in SUBURBAN PROPANE PARTNERS at the current market prices. More…

Peers

The company faces competition from other large propane companies such as Atmos Energy Corp, Spire Inc and Unimot SA, who all strive to provide competitively priced and efficient services to their respective customers.

– Atmos Energy Corp ($NYSE:ATO)

Atmos Energy Corp is an integrated natural gas company that provides natural gas distribution and related services to over three million residential, commercial, public authority, and industrial customers in eight states. As of 2023, Atmos Energy Corp had a market cap of 15.35 billion and a Return on Equity (ROE) of 6.44%. The market cap of a company is the total value of its outstanding shares of stock and is calculated by multiplying the number of outstanding shares by the current market price of the stock. Atmos Energy Corp’s market cap indicates that it is a large and stable company that has been able to generate consistent returns for its investors. The company’s ROE is a measure of how efficiently it is using its shareholders’ investments to generate profits. Atmos Energy Corp’s 6.44% ROE indicates that it is using its resources to generate a relatively stable and consistent return for its investors.

– Spire Inc ($NYSE:SR)

Spire Inc is a leading energy services company that operates natural gas infrastructure, utility services, and renewable energy solutions in the United States. With a market cap of 3.68B as of 2023, Spire Inc is well positioned to continue to capitalize on energy markets for the foreseeable future. Its Return on Equity (ROE) has also been strong at 8.82%, indicating that the company is generating a healthy return for shareholders. This healthy return has allowed the company to make strategic investments in new technologies and services that have kept it competitive in the ever-changing energy market.

– Unimot SA ($LTS:0ROK)

Unimot SA is a Polish fuel and energy company that operates in the retail fuel and energy sector. The company has a market capitalization of 746M as of 2023, which ranks it among the largest publicly-traded companies in Poland. Unimot SA has also maintained a strong Return on Equity (ROE) of 37.34%, a sign of the company’s strong financial performance. Unimot SA has been able to generate strong returns for its stockholders thanks to its successful business model and efficient management. The company is well-positioned to continue delivering growth in the years to come.

Summary

Investors will want to pay close attention to future developments and news from the company to determine whether or not the earnings beat is indicative of a long-term trend. Suburban Propane continues to invest heavily in growth initiatives, and its ability to successfully execute on these initiatives will be critical to its performance going forward.