Matrix Service Company Earnings Preview

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Matrix Service Company (NAS: MTRX) hasn't been able to establish an earnings trend, bouncing between beating and falling short of estimates during the past fiscal year. The company will unveil its latest earnings on Wednesday, Nov. 2. Matrix Service provides construction, repair, and maintenance services primarily to the energy and energy-related industries.

What analysts say:

  • Buy, sell, or hold?: The majority of analysts back Matrix Service Company as a buy. But with 60% of analysts rating it a buy, Matrix Service Company is still below the mean analyst rating of its nearest 10 competitors, which average 68.1% buys. Analysts like Matrix Service Company better than competitor Willbros Group overall. Five out of 11 analysts rate Willbros Group a buy compared to three of five for Matrix Service Company. While analysts still rate the stock a moderate buy, they are a little more optimistic about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $165.8 million in revenue this quarter. That would represent a rise of 9.2% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.17 per share. Estimates range from $0.16 to $0.19.

What our community says:
CAPS All-Stars are solidly behind the stock with 100% giving it an "outperform" rating. The community at large concurs with the All-Stars with 95.9% awarding it a rating of "outperform." Fools have embraced Matrix Service Company, though the message boards have been quiet lately with only 79 posts in the past 30 days. Matrix Service Company has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
The company increased its gross margin by 10.1 percentage points in the last quarter. Revenue rose 16.3% while cost of sales rose 4.2% to $142.8 million 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

12.8%

13.6%

11.3%

10.3%

Operating Margin

5.8%

5.6%

4.9%

3.4%

Net Margin

3.5%

3.6%

3.0%

2.0%

One final thing: If you want to keep tabs on Matrix Service Company movements, and for more analysis on the company, make sure you add it to your Watchlist.

At the time this article was published Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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