Shares of American Woodmark Corp. (NASDAQ:AMWD) hit a new 52-week high of $22.00 on Aug. 21, the day of its fiscal first-quarter 2013 earnings release that saw an astounding surprise of 333.33%. This Zacks No. 2 Rank manufacturer and distributor of cabinets and vanities sees bright prospects ahead, with the demand for new-home construction gaining traction.
Solid First Quarter
American Woodmark’s fiscal first-quarter 2013 adjusted earnings came in at 7 cents per share, well ahead of the Zacks Consensus Estimate for a loss of 3 cents and the year-ago loss of 19 cents. Results benefited primarily from top-line growth.
Total revenue was $148.3 million, which increased 13.0% from the year-ago quarter driven mostly by 40% sales growth in the new-home construction business. Total revenue also beat the Zacks Consensus Estimate of $138 million. The company distributes its products through two sales channels: remodeling and new construction.
Gross margins expanded 90 basis points to 14.9% on the back of revenue growth and reduced fixed costs.
Earnings Momentum Climbing Sharply
The Zacks Consensus Estimate for fiscal 2013 has moved up by 110% to 21 cents over the last 60 days, suggesting a year-over-year increase of 127.1%. For fiscal 2014, the Zacks Consensus Estimate has increased 16% to 58 cents over the same time frame, representing a year-over-year increase of 182.8%.
American Woodmark currently trades at a price-to-book (P/B) multiple of 2.10, reflecting a 96.3% premium to the peer group average of 1.07. The P/S multiple for the stock is 0.52, which is at a slight premium of 10.6% to the peer group average of 0.47. However, given its strong fundamentals, the premium valuation looks justified.
Chart Showing Consistent Rise
Shares of American Woodmark have been rising since early August 2012 before reaching a new 52-week high. Moreover, the stock is currently trading above its 50- and 200-day moving averages, which stand at $18.73 and $16.51, respectively. In fact, the stock has been consistently trading above its 200-day moving average since mid-March 2012 and above its 50-day moving average since mid-August 2012.
Volume is fairly strong, averaging roughly 64,000 daily. The year-to-date return for the stock is 39.89%, compared to the S&P 500's return of 13.97%.
Based in Winchester, Va., American Woodmark manufactures and distributes kitchen cabinets and vanities for the remodeling and new-home construction markets. The company’s leading brands include American Woodmark, Timberlake, Shenandoah Cabinetry, Potomac, and Waypoint Living Spaces. The company has a market cap of $292.94 million.