Zacks Investment Research downgraded Gibraltar Industries, Inc. ROCK to a Zacks Rank #5 (Strong Sell) on Mar 11, 2015. Going by the Zacks model, companies holding a Zacks Rank #5 have strong chances of performing worse than the broader market.
Why the Downgrade?
Gibraltar Industries’ adjusted earnings of 2 cents per share in fourth-quarter 2014 lagged earnings of 8 cents per share recorded in the year-ago quarter. The decline in earnings was primarily caused by poor performance of the company’s Industrial and Infrastructure Products segment.
Revenue growth of 7% was offset by a 13.1% increase in costs of sales. Gross profit declined 20% year over year with margin coming in at 14.1%, down 470 basis points (bps) year over year. The company’s adjusted operating margin fell 140 bps to 2.2%.
Soft year-over-year results have weakened investor sentiments on Gibraltar Industries, with the share price falling nearly 14.9% since Feb 20. Investors also remain wary about the company’s prospects in the years ahead. Over the last 30 days, the Zacks Consensus Estimate for the stock has decreased 18.3% to 58 cents per share for 2015 and 21.7% to 72 cents per share for 2016. Earnings estimate for first-quarter 2015 stands at a loss of one cent per share.
Stocks to Consider
Gibraltar Industries currently has a market capitalization of $425 million. Some better-ranked stocks in the industry include Grana y Montero SAA GRAM, Trex Co. Inc. TREX and Quanex Building Products Corporation NX. All these stocks sport a Zacks Rank #1 (Strong Buy).
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