NEW YORK (TheStreet) -- American Woodmark (AMWD) plunged 11.99% to $32, down $4.36 from its previous close of $36.36, at the close of the trading day on Tuesday after the cabinet manufacturer reported third-quarter earnings that fell short of analysts' expectations.
The company reported earnings per share of 18 cents, nine cents below the Capital IQ consensus estimate of 27 cents. Revenue totaled $169 million for the quarter, slightly less than analysts' estimate of $169.83 million. American Woodmark also noted that its remodeling and new construction sectors grew during the third quarter, and the latter category's growth exceeded 25%.
The stock had a volume of 853,879, far greater than its average of 190,177. It hit a high of $34.90 and a low of $31.11 for the day. The stock holds a one-year high of $39.97 and a one-year low of $29.40.
TheStreet Ratings team rates AMERICAN WOODMARK CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate AMERICAN WOODMARK CORP (AMWD) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 4.5%. Since the same quarter one year prior, revenues rose by 19.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- AMWD's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, AMWD has a quick ratio of 2.25, which demonstrates the ability of the company to cover short-term liquidity needs.
- AMERICAN WOODMARK CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, AMERICAN WOODMARK CORP turned its bottom line around by earning $0.66 versus -$1.45 in the prior year. This year, the market expects an improvement in earnings ($1.57 versus $0.66).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Building Products industry average. The net income increased by 170.3% when compared to the same quarter one year prior, rising from $1.95 million to $5.27 million.
- You can view the full analysis from the report here: AMWD Ratings Report