The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Allegion (NYSE:ALLE) and the rest of the electrical systems stocks fared in Q1.
Like many equipment and component manufacturers, electrical systems companies are buoyed by secular trends such as connectivity and industrial automation. More specific pockets of strong demand include Internet of Things (IoT) connectivity and the 5G telecom upgrade cycle, which can benefit companies whose cables and conduits fit those needs. But like the broader industrials sector, these companies are also at the whim of economic cycles. Interest rates, for example, can greatly impact projects that drive demand for these products.
The 12 electrical systems stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 0.6%. while next quarter's revenue guidance was 101% below consensus. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and electrical systems stocks have held roughly steady amidst all this, with share prices up 2.9% on average since the previous earnings results.
Allegion (NYSE:ALLE) Allegion plc (NYSE:ALLE) is a provider of security products and solutions that keep people and assets safe and secure in various environments.
Allegion reported revenues of $893.9 million, down 3.2% year on year, in line with analysts' expectations. Overall, it was a solid quarter for the company with a decent beat of analysts' organic revenue and earnings estimates.
“Allegion’s Q1 performance sets a solid foundation for the year,” said John H. Stone, Allegion President and CEO.
The stock is flat since reporting and currently trades at $127.41.
Is now the time to buy Allegion? Find out by reading the original article on StockStory, it's free.
Best Q1: Encore Wire (NASDAQ:WIRE) Started in a small warehouse in Texas in 1989, Encore Wire (NASDAQ:WIRE) manufactures a range of electrical building wire and cables.
Encore Wire reported revenues of $632.7 million, down 4.2% year on year, outperforming analysts' expectations by 7.3%. It was an impressive quarter for the company with a decent beat of analysts' earnings estimates.
Encore Wire achieved the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 2.2% since reporting. It currently trades at $289.95.
Weakest Q1: Identiv (NASDAQ:INVE) Emerging from bankruptcy and rebranding in 2013, Identiv (NASDAQCM:INVE) provides digital identity and security solutions for various industries.
Identiv reported revenues of $22.49 million, down 13.5% year on year, falling short of analysts' expectations by 2.2%. It was a weak quarter for the company with a miss of analysts' earnings estimates.
As expected, the stock is down 19% since the results and currently trades at $4.09.
Vertiv (NYSE:VRT) Formerly part of Emerson (NYSE:EMR) Electric, Vertiv (NYSE:VRT) manufactures and services infrastructure technology products for data centers and communication networks.
Vertiv reported revenues of $1.64 billion, up 7.8% year on year, in line with analysts' expectations. Revenue aside, it was a slower quarter for the company with a miss of analysts' earnings estimates and full-year revenue guidance missing analysts' expectations.
Vertiv had the weakest full-year guidance update among its peers. The stock is up 4.9% since reporting and currently trades at $83.05.
Hubbell (NYSE:HUBB) A respected player in the electrical segment, Hubbell (NYSE:HUBB) manufactures electronic products for the construction, industrial, utility, and telecommunications markets.
Hubbell reported revenues of $1.40 billion, up 8.8% year on year, surpassing analysts' expectations by 1.4%. Overall, it was an ok quarter for the company with a narrow beat of analysts' earnings estimates but a miss of analysts' organic revenue estimates.
The stock is down 9.5% since reporting and currently trades at $368.78.
This content was originally published on Stock Story
