Casey's General Stores Earnings Preview

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After beating estimates last quarter by $0.10, Casey's General Stores (NAS: CASY) has set the standard for itself. The company will unveil its latest earnings on Tuesday, Sept. 6. Casey's General Stores and its wholly owned subsidiaries operate convenience stores in nine Midwestern states, mainly Iowa, Missouri, and Illinois.

What analysts say:

  • Buy, sell, or hold?: Half of analysts think investors should stand pat on Casey's General Stores while the remaining half rate the stock as a buy. Wall Street has warmed to the stock over the past three months, with analysts increasing their endorsement from hold to moderate buy.
  • Revenue Forecasts: On average, analysts predict $1.88 billion in revenue this quarter. That would represent a rise of 38.2% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $1.04 per share. Estimates range from $0.94 to $1.20.

What our community says:
CAPS All-Stars are solidly behind the stock, with 97.4% awarding it an "outperform" rating. The community at large agrees with the All-Stars, with 90.1% granting it a rating of "outperform." Fools are keen on Casey's General Stores, though the message boards have been quiet lately with only 57 posts in the past 30 days. Despite the majority sentiment in favor of Casey's General Stores, the stock has a middling CAPS rating of three out of five stars.

Management:
Casey's General Stores' income has fallen year over year by an average of 18.1% over the past five quarters. The company's gross margin shrank by two percentage points in the last quarter. Revenue rose 31.3% while cost of sales rose 34.5% to $1.33 billion from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters:

Quarter

Q4

Q3

Q2

Q1

Gross Margin

14.0%

14.7%

16.8%

17.2%

Operating Margin

2.9%

2.2%

4.0%

4.6%

Net Margin

1.5%

0.9%

1.6%

2.7%

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At the time this article was published

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