SAN ANTONIO, Texas - XPEL, Inc. (NASDAQ:XPEL), a global provider of protective films and coatings, reported a fourth quarter earnings per share (EPS) of $0.43, falling short of the analyst consensus estimate of $0.48. Despite this, the company's revenue for the quarter surged to $105.54 million, exceeding the consensus estimate of $96.61 million and marking a significant 34.5% increase from the fourth quarter of the previous year.
President and CEO Ryan Pape expressed satisfaction with the company's full year performance, highlighting strong growth in the fourth quarter. Pape attributed the success to robust performance across end markets and product offerings, which drove profitability improvements. He emphasized key progress in areas such as new car dealership focus, go-to-market strategy enhancements in China, India, and the Middle East, and the launch of the next generation software platform DAPNext.
Despite the positive revenue growth, XPEL's stock experienced a 2.8% decline, indicating a negative market response, likely due to the EPS miss. The company's net income saw a notable year-over-year (YoY) increase of 43.2% to $12.0 million. Additionally, EBITDA grew by 33.6% to $17.7 million, representing 16.7% of revenue.
For 2024, XPEL has forecasted an annual revenue growth of approximately 15%, signaling continued optimism for the company's performance in the upcoming year.
The geographical revenue summary showed impressive growth in the China region with a 166.6% increase, contributing to 15.7% of the total revenue. The Middle East/Africa region also saw a substantial increase of 100.4% YoY. Product revenue, which includes the company's film products, rose by 35.8% YoY, while service revenue, which includes installation labor, climbed by 30.0% YoY.
The company's gross margin percentage experienced a slight decline from 39.6% to 38.8% compared to the same quarter last year, attributed mainly to the increase in lower margin revenue from China and the Middle East/Africa.
In his comments, CEO Ryan Pape said, "We are pleased with our full year 2023 performance and closed out the year with solid growth in the fourth quarter. We look forward to building on the momentum of last year across all of our initiatives, staying close to our customers and furthering the XPEL brand in 2024."
XPEL's financial results are preliminary and unaudited, with the final financial statements for the fourth quarter and full fiscal year 2023 to be included in the company's Annual Report on Form 10-K, anticipated to be filed on or prior to February 29, 2024.
InvestingPro Insights
XPEL, Inc.'s recent earnings report has given investors much to consider, and InvestingPro provides additional context to assess the company's financial health and stock performance. With a market capitalization of $1.48 billion and a Price/Earnings (P/E) ratio of 31.03, XPEL trades at a higher earnings multiple, which is a focal point for investors looking at valuation. This P/E ratio is slightly above the adjusted last twelve months figure of 30.11, indicating a premium valuation compared to recent earnings.
Revenue growth remains a strong suit for XPEL, with a 16.98% increase over the last twelve months as of Q1 2023. This aligns with the company's reported surge in quarterly revenue and supports the CEO's positive outlook for continued growth. However, the stock's performance has been mixed, with a notable six-month price total return of -34.31%, reflecting the market's reaction to various factors including the recent EPS miss. On the upside, the three-month price total return has rebounded to 20.56%, suggesting some recovery in investor confidence.
InvestingPro Tips for XPEL highlight its volatility in stock price movements and its high valuation multiples in terms of EBITDA and revenue. These tips are particularly relevant given the company's current financial position and market performance. For investors seeking a deeper dive into XPEL's valuation and stock behavior, InvestingPro offers additional insights, with 11 more tips available that could guide investment decisions.
For those looking to leverage these insights, InvestingPro invites you to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing access to a wealth of financial data and expert analysis to inform your investment strategy.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.