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 OSI Systems (NASDAQ:OSIS) 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 below consensus. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, and electrical systems stocks have held roughly steady amidst all this, with share prices up 4.5% on average since the previous earnings results.
OSI Systems (NASDAQ:OSIS) With a name reflecting its initial focus on optical sensors, OSI Systems (NASDAQGS:OSIS) is a designer and manufacturer of specialized electronic systems and components.
OSI Systems reported revenues of $405.4 million, up 33.8% year on year, in line with analysts' expectations. Overall, it was a strong quarter for the company with a decent beat of analysts' earnings estimates.
Deepak Chopra, OSI Systems’ Chairman and Chief Executive Officer, stated, “We are pleased to report strong financial results as outstanding performance in the Security division led to record third quarter revenues and adjusted earnings per share. Given continued solid bookings, a strong backlog, and high visibility into our pipeline of opportunities, we anticipate a strong conclusion to fiscal 2024 and we believe we are well positioned for fiscal 2025.”
OSI Systems scored the fastest revenue growth of the whole group. The stock is up 4.7% since reporting and currently trades at $145.95.
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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 scored 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 11.5% since the results and currently trades at $4.47.
Allegion (NYSE:ALLE) Spun off from Ingersoll Rand in 2013, Allegion (NYSE:ALLE) is a provider of security products, specializing in mechanical and electronic security hardware.
Allegion reported revenues of $893.9 million, down 3.2% year on year, in line with analysts' expectations. Revenue aside, it was a solid quarter for the company with a decent beat of analysts' organic revenue and earnings estimates.
The stock is down 3% since reporting and currently trades at $122.72.
Atkore (NYSE:ATKR) Protecting the things that power our world, Atkore (NYSE:ATKR) designs and manufactures electrical safety products.
Atkore reported revenues of $792.9 million, down 11.5% year on year, falling short of analysts' expectations by 1.9%. More broadly, it was a weak quarter for the company with a miss of analysts' organic revenue estimates.
The stock is down 18.6% since reporting and currently trades at $143.60.
This content was originally published on Stock Story
