Concrete Pumping Holdings Delivers Mixed Q3 Results, Shares Drop 2.8%

Shares of Concrete Pumping Holdings, Inc. (BBCP) were down 2.8% in the extended trading session on Wednesday after the company reported mixed Fiscal Q3 results with squeezed margins due to inflationary cost pressures.

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Markedly, shares of the provider of concrete pumping and concrete waste management services in the U.S. and U.K. have gained 132% over the past year. (See Concrete Pumping Holdings stock charts on TipRanks)

The company reported adjusted earnings of 0.07 per share. Comparatively, the company was break-even in the prior-year quarter.

Revenues jumped 5% year-over-year to $80.8 million versus $77.1 million in the prior-year period. The increase in revenues reflected a surge in the company’s U.K. operations, which increased 37% to $12.7 million, and an 8% growth in U.S. Concrete Waste management Services to $10.1 million.

However, gross margin worsened 290 bps to 46.1% due to inflationary cost pressures leading to higher fuel costs.

Further, the adjusted EBITDA margin declined 370 bps to 35.2% versus 38.9% reported in the prior-year quarter.

Concrete Pumping Holdings CEO Bruce Young commented, “As we enter the last quarter of our 2021 fiscal year, we continue to see strong demand for residential and infrastructure projects, and we are seeing the gradual return of commercial work as the economy recovers.”

He further cautioned, “While we are not immune to inflationary pressures or supply chain constraints that may delay other areas of the customers we serve, our team is doing a great job managing these challenges and meeting the needs of our customers.”

Looking forward, the company reiterated its full-year guidance for Fiscal 2021. The company forecast adjusted EBITDA in the range of $105 to $110 million. Revenues are forecast to be in the range of $300 to $310 million.

The company also announced that it acquired Hi-Tech Concrete Pumping Services, a provider of concrete pumping services in Houston, Texas in an all-cash deal worth $12.3 million.

Robert W. Baird analyst Andrew Wittmann recently reiterated a Buy rating on the stock with the price target of $11 (24.4% upside potential).

Consensus among analysts is a Strong Buy based on 3 unanimous Buys. The average Concrete Pumping Holdings price target of $11 implies 24.4% upside potential to current levels.

BBCP scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.