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Earnings season officially begins to accelerate this week, with a surplus of companies on deck to report quarterly results.
Investors are eager to see how companies have sailed through the challenging macroeconomic backdrop we’ve found ourselves in. At the very least, market participants will further understand how these issues have affected consumer sentiment.
One company, Cintas (CTAS - Free Report) , is slated to release its 2022 Q4 results before the opening bell on Thursday. The company is a Zacks Rank #3 (Hold) with an overall VGM Score of a C. Heading into the report, CTAS carries an Earnings ESP Score of -2.1%.
Cintas designs, manufactures, and implements corporate identity uniform programs. In addition, the company provides entrance mats, restroom supplies, promotional products, and first aid products for diversified businesses.
Let’s examine the company on a closer level to see how the company shapes up heading into the quarterly report.
Share Performance & Valuation
Year-to-date, CTAS shares have displayed a higher level of defense than the S&P 500, declining around 14% in value.
Image Source: Zacks Investment Research
Upon widening the timeframe to encompass a year’s worth of price action, we can see that CTAS shares have easily outperformed the S&P 500.
Image Source: Zacks Investment Research
Cintas sports a pricey 30.9X forward earnings multiple, just a tick below its five-year median of 31.0X but nicely underneath 2020 highs of 42.8X. Additionally, the current value represents a staggering 112% premium relative to its Zacks Sector.
Cintas has a Value Style Score of a D.
Image Source: Zacks Investment Research
Quarterly Performance & Share Reactions
The company’s quarterly reports have been the definition of consistency, exceeding bottom-line expectations in 20 consecutive quarters. The company has surpassed EPS estimates by an average of 8% over its last four quarters, and in its latest quarter, CTAS exceeded the Zacks Consensus EPS Estimate by a solid 9%.
Top-line results have also been strong – Cintas has beaten quarterly revenue expectations in 18 of its last 20 quarterly reports.
Shares have generally moved downwards following an EPS beat; over its last ten bottom-line beats, shares have moved upwards just four times.
Growth Estimates
For the quarter to be reported, the $2.68 per share estimate reflects a respectable 8.5% growth in earnings from the year-ago quarter. Over the last 60 days, the Consensus Estimate Trend has remained unchanged.
Image Source: Zacks Investment Research
Looking at the top-line, the Zacks Consensus Estimate resides at $2 billion, which would pencil in a nice 9% growth in quarterly revenue year-over-year compared to year-ago quarterly sales of $1.8 billion.
Bottom Line
The company’s shares have provided a much higher level of performance than the S&P 500 over the last year, quarterly results have been excellent, and growth rates for the quarter display strength.
However, the company’s shares appear quite elevated in terms of valuation, shares have not reacted well historically to EPS beats, and rising costs have most likely impacted margins. For these reasons, I believe that investors should head into the report with a heightened level of defense.
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Cintas Q4 Preview: Another EPS Beat in Store?
Earnings season officially begins to accelerate this week, with a surplus of companies on deck to report quarterly results.
Investors are eager to see how companies have sailed through the challenging macroeconomic backdrop we’ve found ourselves in. At the very least, market participants will further understand how these issues have affected consumer sentiment.
One company, Cintas (CTAS - Free Report) , is slated to release its 2022 Q4 results before the opening bell on Thursday. The company is a Zacks Rank #3 (Hold) with an overall VGM Score of a C. Heading into the report, CTAS carries an Earnings ESP Score of -2.1%.
Cintas designs, manufactures, and implements corporate identity uniform programs. In addition, the company provides entrance mats, restroom supplies, promotional products, and first aid products for diversified businesses.
Let’s examine the company on a closer level to see how the company shapes up heading into the quarterly report.
Share Performance & Valuation
Year-to-date, CTAS shares have displayed a higher level of defense than the S&P 500, declining around 14% in value.
Image Source: Zacks Investment Research
Upon widening the timeframe to encompass a year’s worth of price action, we can see that CTAS shares have easily outperformed the S&P 500.
Image Source: Zacks Investment Research
Cintas sports a pricey 30.9X forward earnings multiple, just a tick below its five-year median of 31.0X but nicely underneath 2020 highs of 42.8X. Additionally, the current value represents a staggering 112% premium relative to its Zacks Sector.
Cintas has a Value Style Score of a D.
Image Source: Zacks Investment Research
Quarterly Performance & Share Reactions
The company’s quarterly reports have been the definition of consistency, exceeding bottom-line expectations in 20 consecutive quarters. The company has surpassed EPS estimates by an average of 8% over its last four quarters, and in its latest quarter, CTAS exceeded the Zacks Consensus EPS Estimate by a solid 9%.
Top-line results have also been strong – Cintas has beaten quarterly revenue expectations in 18 of its last 20 quarterly reports.
Shares have generally moved downwards following an EPS beat; over its last ten bottom-line beats, shares have moved upwards just four times.
Growth Estimates
For the quarter to be reported, the $2.68 per share estimate reflects a respectable 8.5% growth in earnings from the year-ago quarter. Over the last 60 days, the Consensus Estimate Trend has remained unchanged.
Image Source: Zacks Investment Research
Looking at the top-line, the Zacks Consensus Estimate resides at $2 billion, which would pencil in a nice 9% growth in quarterly revenue year-over-year compared to year-ago quarterly sales of $1.8 billion.
Bottom Line
The company’s shares have provided a much higher level of performance than the S&P 500 over the last year, quarterly results have been excellent, and growth rates for the quarter display strength.
However, the company’s shares appear quite elevated in terms of valuation, shares have not reacted well historically to EPS beats, and rising costs have most likely impacted margins. For these reasons, I believe that investors should head into the report with a heightened level of defense.