Pep Boys Earnings Preview

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Pep Boys (NYS: PBY) 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 Monday, Dec. 6. Pep Boys is engaged mainly in automotive repair and maintenance and in the sale of automotive tires, parts, and accessories through a chain of stores.

What analysts say:

  • Buy, sell, or hold?: Analysts are bullish on this stock, with four analysts rating it as a buy and only one rating it as a sell. That rating hasn't budged in three months as analysts have remained unchanged in their opinion of the stock.
  • Revenue forecasts: On average, analysts predict $523.2 million in revenue this quarter. That would represent a rise of 5.4% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.13 per share. Estimates range from $0.09 to $0.15.

What our community says:
CAPS All-Stars are solidly behind the stock, with 82.1% assigning it an outperform rating. The community at large concurs with the All-Stars, with 79.4% giving it a rating of outperform. Fools have embraced Pep Boys, though the message boards have been quiet lately, with only 87 posts in the past 30 days. Despite the majority sentiment in favor of Pep Boys, the stock has a middling CAPS rating of three out of five stars.

Management:
Pep Boys's profit has risen year over year by an average of more than twofold over the past five quarters. Revenue has now gone up for three straight quarters.

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

Q2

Q1

Q4

Q3

Gross Margin

25.9%

26.3%

26.1%

25.4%

Operating Margin

4.2%

5.1%

3.7%

3%

Net Margin

2.7%

2.4%

1.8%

1.2%

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Earnings estimates provided by Zacks.

At the time this article was published

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