Boyd Group Q3 Profit Drops Sharply; Shares Plunge

Shares of Boyd Group Services (BYD) tumbled on Wednesday after the company reported its third-quarter results.

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The operator of non-franchised collision repair centers posted a significant drop in profit due to personnel and supply chain issues. (See Insiders’ Hot Stocks on TipRanks)

Sales & Earnings

Sales came in at $490.2 million in the third quarter, an increase of 28.4% from $381.7 million in the prior-year quarter. Same-store sales increased by 10.7%.

Boyd Group posted net earnings of $0.4 million ($0.02 per share) in Q3 2021, compared to net earnings of $15.9 million ($0.74 per share) in Q3 2020.

The company reported an adjusted profit of $2.4 million ($0.11 per share) in the third quarter of 2021, compared to an adjusted profit of $16.4 million ($0.76 per share) a year ago.

Boyd Group president and CEO Timothy O’Day said, “In addition to a tight labor market and the slow recovery of demand in Canada, during the third quarter, we faced rapidly increasing supply chain disruptions for original equipment and aftermarket parts in both the Canadian and U.S. markets, which quickly resulted in a negative impact on margins as a higher percentage of parts had to be sourced from non-primary suppliers in order to complete repairs.”

Boyd has opened 52 locations in the quarter, including 48 through acquisition. The company announced a 2.1% dividend increase to $0.576 per annualized share, from $0.564 per annualized share.

Wall Street’s Take

On November 9, Raymond James analyst Steve Hansen maintained a Buy rating on BYD and set a price target of C$262. This implies 19.6% upside potential.

Overall, consensus on the Street is that BYD is a Moderate Buy based on four Buys and four Holds. The average Boyd Group price target of C$271.49 implies 23.9% upside potential to current levels.