Shares of Dye & Durham (TSE: DND) finished 17.35% higher today despite the S&P 500 (SPX) declining by 0.21%. In the past day, DND shared two important pieces of news. The first was its Fiscal Q4-2022 and full-year earnings results. The second piece of news was that DND is starting a normal course issuer bid (share buybacks). The market seemed to like these announcements, sending shares higher.
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Dye & Durham’s Q4-2022 and Full-Year Results
For the fourth quarter, revenue came in at C$129.7 million, a 54% increase year-over-year. Meanwhile, adjusted EBITDA and net income came in at C$75.2 million and -C$3.3 million, respectively. Adjusted EBITDA grew 53%, and net income turned negative, as it was C$6.3 million in the same period last year. These results were slightly better than the preliminary results released just two weeks ago.
For the full year, revenue increased by 127%, reaching C$474.8 million. Net income also increased, going from -C$40.9 million to C$7.8 million. Lastly, Dye & Durham’s adjusted EBITDA grew by 129% for the full year, coming in at C$266.9 million. Lastly, DND’s operating cash flow increased from C$79.35 million to C$185.44 million.
Dye & Durham Announces Share Buybacks
This morning, Dye & Durham announced that it intends to repurchase up to 3,457,508 of its shares over the next year. This amounts to about 5% of its outstanding shares. The company will be able to buy back its shares starting September 30. This is a sign that management believes that DND stock is undervalued.
Is Dye & Durham Stock a Buy, According to Analysts?
Turning to Wall Street, DND has a Strong Buy consensus rating based on three Buy ratings. The average Dye & Durham price target of C$30.50 implies 98.7% upside potential.
One of the Buy ratings comes from five-star-rated analyst Robert Young, who is ranked #220 out of 7,962 analysts on TipRanks. Young has an average return per rating of 15.7% (measured on a one-year basis). He reiterated a Buy rating two days ago, giving the stock a C$38 price target.
Conclusion: Solid Results and Buybacks Sparked a Rally
Dye & Durham released solid results that showed very high revenue and cash-flow growth. In addition, due to its recent plunge, management now believes that the stock is undervalued, starting a share buyback plan. This was enough to send the stock more than 17% higher today while the overall market struggled.
