AZZ Incorporated (NYSE:AZZ): AZZ shares climb after topping the revenue and earnings estimates for the first quarter by $33 million and $0.11 per share, respectively. Its revenue also increased substantially from last year due to improvement in its energy and metal coating segment.
The stock is still down 23% compared to the last twelve months; an earnings-related rally pushed AZZ share price to the highest level six months ago. The recent AZZ shares climb resulted in its current trading of around $48 – with a 52-week trading range of $39.50 – $57.65. The stock has the market capitalization of $1.27 billion, and its average trading volume is approximately 165,114.6 a day.
First Quarter Results and Full-Year Outlook is Optimistic
AZZ Incorporated generated a revenue growth of 27% in the first quarter thanks to improving dynamics in energy and metal coating segments.
Its energy segment revenue enlarged 29.8% in the first quarter while revenue for the metal coating segment grew 25.2% from the same period last year. The order backlog for the industrial company increased 7% year over year to $329 million – which is indicating an increasing demand for its products.
The company has recently received orders from Pinggao Group Company Limited and SDEE Hitachi High Voltage Switchgear to provide roughly 7,431 meters of Ultra High Voltage 1100KV Gas Insulated Line. AZZ expects to generate $40 million in revenue from these two contracts.
AZZ’s strategy of enhancing its organic growth potential along with driving operational efficiencies allowed it to present a rosy outlook for this year. The company expects fiscal 2019 earnings per share and revenue to stand in the range of $2.25 per diluted share and $960 million, respectively – compared to a revenue of $810 million and earnings of $1.75 per share last year.
AZZ Shares Climb: Better Valuations
AZZ valuations are hovering below the industry average – which usually represents that the stock is undervalued compared to the industry peers. AZZ share price trades at 1.4 times to sales and 2 times to book ratio, considerably lower than the industry average as shown in the above chart. Its price to earnings ratio of 25 is also lower than several industry peers.
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