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North American Construction (NOA) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

North American Construction (NOA) closed the most recent trading day at $10.34, moving -0.39% from the previous trading session. This move lagged the S&P 500's daily gain of 0.69%. Meanwhile, the Dow gained 0.65%, and the Nasdaq, a tech-heavy index, added 0.58%.

Prior to today's trading, shares of the heavy construction and mining services company had lost 2.81% over the past month. This has lagged the Construction sector's loss of 1.28% and the S&P 500's gain of 1.36% in that time.

NOA will be looking to display strength as it nears its next earnings release, which is expected to be July 30, 2019. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $122.63 million, up 99.11% from the year-ago period.

NOA's full-year Zacks Consensus Estimates are calling for earnings of $1.35 per share and revenue of $520.38 million. These results would represent year-over-year changes of +221.43% and +64.35%, respectively.

Investors should also note any recent changes to analyst estimates for NOA. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. NOA is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, NOA currently has a Forward P/E ratio of 7.69. Its industry sports an average Forward P/E of 10.82, so we one might conclude that NOA is trading at a discount comparatively.

The Building Products - Heavy Construction industry is part of the Construction sector. This group has a Zacks Industry Rank of 70, putting it in the top 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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