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Why Is Lamar (LAMR) Down 1.2% Since Last Earnings Report?

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A month has gone by since the last earnings report for Lamar Advertising (LAMR - Free Report) . Shares have lost about 1.2% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Lamar due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Lamar Advertising's Q1 AFFO Misses, Revenues Beat

Lamar reported first-quarter 2019 adjusted funds from operations (AFFO) of 99 cents per share, missing the Zacks Consensus Estimate of $1. Nonetheless, it marks a 1% increase from the year-ago quarter’s reported tally of 98 cents per share.

Net revenues for the first quarter climbed 6.5% from the prior-year quarter reported tally to $384.5 million. Moreover, the revenue figure outpaced the Zacks Consensus Estimate of $383.9 million.

Robust top-line growth supported the company’s performance in the quarter. Furthermore, higher operating income and free cash flow indicate strength in operating performance.

Quarter in Detail

Operating income increased to $90.8 million from $65.9 million recorded in the year-ago period. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 5.2%, year over year, to $146.1 million. Additionally, free cash flow of $82.7 million in the March-end quarter was up 1.6% year over year.

At the end of first-quarter 2019, Lamar had total liquidity of $389.7 million, of which $356.9 million was available under its revolving senior credit facility, and $32.8 million in cash and cash equivalents.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

At this time, Lamar has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision has been net zero. It comes with little surprise Lamar has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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