Apogee Hits 52 Week High; Is This the Right Time to Buy? - Analyst Blog
Shares of Apogee Enterprises APOG reached a new 52-week high of $60.67 on Jun 16 and eventually closed a tad lower at $60.16. The stock continues to see price appreciation on the back of robust fourth-quarter fiscal 2015 earnings, backlog and a strong outlook.
Apogee has delivered a solid one-year return of about 94% and a year-to-date return of 43%, outperforming the respective S&P 500. Average volume of shares traded over the last 3 months is approximately 227K.
This Minneapolis, MN-based leader in technologies for the design and development of value-added glass products, services and systems has a market cap of $1.76 billion and long-term estimated earnings per share growth rate of 10%. The company has surpassed the Zacks Consensus Estimate in two of the trailing four quarters with an average surprise of 6.42%.
Drivers
Shares of Apogee have traded consistently above the $50 range since Apr 8 when the company reported strong fourth-quarter fiscal 2015 results. Earnings of 47 cents per share improved an impressive 74% year over year and also beat the Zacks Consensus Estimate of 44 cents.
Apogee has also put forward an upbeat outlook for fiscal 2016, projecting revenue growth of 10% to 15% and earnings in the range of $2.05 and $2.20 per share. Capital expenditures are expected to range from $45 million to $50 million as Apogee intends to make investments toward increasing capacity and productivity. Gross margin is expected to be approximately 24%.
In revenues, Apogee expects to cross the $1 billion threshold in fiscal 2016 and to achieve a trailing 12-month operating margin of 10 midway through fiscal 2017. For the longer term, its outlook is $1.3 billion for revenue and 12% for operating margin.
The company expects strong backlog growth in the first quarter, the results of which will be declared on Jun 24, driven by its growing pipeline as well as a high level of bidding activity. Apogee also stands to benefit from the growing architectural market, focus on operational improvements, expansion into new geographies and markets, and new product launches.
Apogee currently has a Zacks Rank #3 (Hold).
Stocks to Consider
Better-ranked stocks in the industry include Albany International Corp. AIN, Astec Industries, Inc. ASTE and Allegion plc Ordinary Shares ALLE. All these stocks carry a Zacks Rank #2 (Buy).
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