Checkpoint Systems Earnings Preview

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Checkpoint Systems (NYS: CKP) 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 Thursday, Feb. 23. Checkpoint Systems is a global manufacturer and provider of technology-driven end-to-end loss prevention, merchandising, and labeling solutions to the retail and apparel industry.

What analysts say:

  • Buy, sell, or hold?: Analysts are very bullish on this stock, unanimously backing it as a buy. Analysts like Checkpoint Systems better than competitor Brady overall. Two out of seven analysts rate Brady a buy compared to two out of two for Checkpoint Systems. That rating hasn't budged in three months as analysts have remained steady in their opinion of the stock.
  • Revenue forecasts: On average, analysts predict $247.3 million in revenue this quarter. That would represent a rise of 5% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is a loss of $0.03 per share. Estimates range from a loss of $0.05 to a loss of $0.01.

What our community says:
CAPS All-Stars are solidly supporting the stock, with 92.3% awarding it an outperform rating. The greater community agrees with the All-Stars, as 87.1% give it a rating of outperform. Despite the majority sentiment in favor of Checkpoint Systems, the stock has a middling CAPS rating of three out of five stars.

Management:
The company's revenue has now risen for two straight quarters. The company's gross margin shrank by 2.9 percentage points in the last quarter. Revenue rose 7.3% while cost of sales rose 12.4% to $136.5 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins serve as an illustration of how efficiently a company captures portions of sales dollars. Checkpoint Systems has seen declining gross margins year-over-year for the last four quarters. Gross margins reflect the total sales revenue retained after costs. See how Checkpoint Systems has been doing for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

37.4%

38.9%

38.1%

39.7%

Operating Margin

(3.9%)

5.7%

(5.7%)

4.2%

Net Margin

(22.6%)

4.3%

(5.0%)

3.3%

For all our Checkpoint Systems-specific analysis, including earnings and beyond, add Checkpoint Systems to My Watchlist.

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Earnings estimates provided by Zacks.

At the time this article was published

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