Checkpoint Systems Earnings Preview

Motley Fool Staff
Updated

Investors braced for a bumpy ride ahead of Checkpoint Systems' (NYS: CKP) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings Tuesday. 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 strongly back Checkpoint Systems, with two of three rating it a buy and the remainder rating it a hold. Analysts like Checkpoint Systems better than competitor China Security & Surveillance Tech overall. Analysts' rating of Checkpoint Systems has stayed constant from three months prior.

  • Revenue forecasts: On average, analysts predict $234.3 million in revenue this quarter. That would represent a rise of 12.6% from the year-ago quarter.

  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.28 per share. Estimates range from $0.24 to $0.32.

What our community says:
CAPS All-Stars are solidly backing the stock with 93.3% giving it an "outperform" rating. The community at large backs the All-Stars with 90.2% assigning it a rating of "outperform." Fools have embraced Checkpoint Systems, though the message boards have been quiet lately with only 28 posts in the past 30 days. Even with a robust four out of five stars, Checkpoint Systems' CAPS rating falls a little short of the community's upbeat outlook.

Management:
Revenue has fallen in the past two quarters. The company's gross margin shrank by 4.9 percentage points in the last quarter. Revenue fell 1.5% while cost of sales rose 6.9% to $114.3 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

Q1

Q4

Q3

Q2

Gross Margin

38.1%

39.7%

40.3%

43.6%

Operating Margin

(5.7%)

4.2%

6.4%

6.8%

Net Margin

(5.0%)

3.3%

3.5%

4.3%

One final thing: If you want to keep tabs on Checkpoint Systems movements, and for more analysis on the company, make sure you add it to your watchlist.

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At the time thisarticle was published

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