L.B. Foster Company FSTR registered a 14.3% rise in its stock value in the past three months thanks to robust first-quarter earnings that exceeded expectations.
Presenting an enticing investment opportunity with strong growth prospects, FSTR sports a Zacks Rank #1 (Strong Buy).
Earnings Outperformance
In the first quarter, FSTR outperformed expectations, with adjusted earnings of 8 cents per share, surpassing the Zacks Consensus Estimate of a loss of 16 cents. It pulled off a trailing four-quarter earnings surprise of around 12.6%, on average.
Robust Growth Prospects
The Zacks Consensus Estimate for FSTR's 2024 earnings is pegged at $1.72, indicating year-over-year growth of a whopping 1,233%. The consensus estimate for the current year experienced an upward revision of 13.5% in the past 60 days, underlining healthy growth potential. Moreover, earnings are expected to register 31.3% growth in second-quarter 2024.
An Outperformer
FSTR's shares are up 89.3% in a year against the industry's rise of 5.8% in the same period.
Image Source: Zacks Investment Research
Strong Q1 Results and Upbeat Prospects
In first-quarter 2024, FSTR demonstrated exceptional growth, with net sales reaching $124.3 million, up nearly 8% from the previous year's tally. Despite the unfavorable impact of divestiture and product line exits, the company achieved 16.9% organic growth, showcasing its robust market presence and operational strength. With a $3 million year-over-year increase in gross profit, partly due to its strategic transformation and a year-over-year reduction in net debt by $2.5 million, FSTR is positioned for continued success and stability. The company also saw a rebound in the Rail business in the quarter after a tepid 2023 with organic sales growth of 29.4%.
The company anticipates strong performance, with adjusted EBITDA expected to be between $34 million and $39 million and net sales forecast in the $525-$560 million range for 2024. FSTR projects a free cash flow of $12-$18 million for the full year, with capital spending targeted at 2-2.5% of sales. This strategic approach ensures continued investment in areas pivotal to long-term success while maintaining financial discipline.
L.B. Foster Company Price and Consensus
L.B. Foster Company price-consensus-chart | L.B. Foster Company Quote
Other Key Picks
Some other top-ranked stocks in the Basic Materials space are Carpenter Technology Corporation CRS, sporting a Zacks Rank #1, and ATI Inc. ATI and Ecolab Inc. ECL, each carrying a Zacks Rank #2 (Buy).
CRS' earnings beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 15.1%. The company's shares have soared 105.1% in the past year.
ATI's earnings beat the Zacks Consensus Estimate in each of the last four quarters, with the earnings surprise being 8.34%, on average. The stock has surged 53.8% in the past year.
The Zacks Consensus Estimate for Ecolab's current-year earnings is pegged at $6.59, indicating a year-over-year rise of 26.5%. The Zacks Consensus Estimate for ECL's current-year earnings has moved up in the past 30 days. ECL beat the consensus estimate in each of the last four quarters, with the earnings surprise being 1.3%, on average. The stock has rallied nearly 36.5% in the past year.
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