Tag: Specialty Business Services

DLH Holdings (DLHC) – A CMOP Update

Posted on by cpereira@noblefcm.com


Thursday, February 29, 2024

DLH delivers improved health and readiness solutions for federal programs through research, development, and innovative care processes. The Company’s experts in public health, performance evaluation, and health operations solve the complex problems faced by civilian and military customers alike, leveraging digital transformation, artificial intelligence, advanced analytics, cloud-based applications, telehealth systems, and more. With over 2,300 employees dedicated to the idea that “Your Mission is Our Passion,” DLH brings a unique combination of government sector experience, proven methodology, and unwavering commitment to public health to improve the lives of millions. For more information, visit www.DLHcorp.com.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

8-K Filing. In an 8-K filing, DLH disclosed the potential loss of one of its VA Consolidated Mail Outpatient Pharmacy (“CMOP”) locations, which accounted for less than 3% of fiscal 2023 consolidated revenue, or about $11 million. According to the filing, on February 22, 2024, DLH was advised that the VA had made an award decision for the Chelmsford CMOP Staffing Services location to a service-disabled veteran owned small business (SDVOSB) unrelated to DLH. Should the VA complete its acquisition process with a final award to an unrelated entity, DLH would no longer perform services at this CMOP location.

Background. To refresh investor memories, DLH was first awarded the CMOP contracts for healthcare logistics and pharmacy services in 2011. At the time, there were nine pharmacy services contracts and seven logistics contracts for the seven geographic locations. The VA has since combined the logistics and pharmacy services in each area, resulting in eight current contracts on which to bid.


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

AZZ Inc. (AZZ) – AZZ releases fiscal 2025 guidance in line with expectations

Posted on by cpereira@noblefcm.com


Monday, February 05, 2024

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Management releases initial fiscal 2025 guidance. Management projects sales of $1.5-$1.6 billion (Noble est. $1.57b), adjusted ebitda of $300-$350 million ($345m), and adjusted diluted EPS of $4.25-$4.75 ($4.50). Guidance assumes $10-$12m of income from its unconsolidated subsidiary ($9.3m), capital expenditures of $100-$120m ($90m), and $60-$100m of debt deleverage ($40m). Management assumes working capital improvements which we have not assumed in our models. Management also reconfirmed fiscal 2024 guidance.

We are not changing our estimates, but will monitor the areas in which we differ with guidance. Our model projects estimates that at the high end of the range for sales and adjusted ebitda but below unconsolidated sub earnings, capital expenditures, and debt reduction. Given that our estimates are generally in line with guidance, we are not making changes at this time. Instead, we will monitor the discrepancies quarterly and make adjustments as needed.


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

DLH Holdings (DLHC) – Post Call Commentary

Posted on by cpereira@noblefcm.com


Friday, February 02, 2024

DLH delivers improved health and readiness solutions for federal programs through research, development, and innovative care processes. The Company’s experts in public health, performance evaluation, and health operations solve the complex problems faced by civilian and military customers alike, leveraging digital transformation, artificial intelligence, advanced analytics, cloud-based applications, telehealth systems, and more. With over 2,300 employees dedicated to the idea that “Your Mission is Our Passion,” DLH brings a unique combination of government sector experience, proven methodology, and unwavering commitment to public health to improve the lives of millions. For more information, visit www.DLHcorp.com.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Waiting on a Budget. The Continuing Resolution continues to hamper DLH’s growth efforts. The Company has plenty of opportunity and stands ready to capitalize on new RFPs. We believe once a budget is passed, there should be a strong flow of new business opportunity for DLH, which will drive organic growth.

1Q24 Bottom Line. The first quarter bottom line was positively impacted by two items. First, due to the CR and bidding opportunities, G&A costs fell to $7.7 million from $10.2 million in 4Q23. G&A costs are likely to remain somewhat muted until a more normal bidding environment emerges. The second was an abnormally low tax rate, 0.5% versus a more typical 25%, due to some discrete items.


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

DLH Holdings (DLHC) – Fiscal 1Q24 First Look

Posted on by cpereira@noblefcm.com


Thursday, February 01, 2024

DLH delivers improved health and readiness solutions for federal programs through research, development, and innovative care processes. The Company’s experts in public health, performance evaluation, and health operations solve the complex problems faced by civilian and military customers alike, leveraging digital transformation, artificial intelligence, advanced analytics, cloud-based applications, telehealth systems, and more. With over 2,300 employees dedicated to the idea that “Your Mission is Our Passion,” DLH brings a unique combination of government sector experience, proven methodology, and unwavering commitment to public health to improve the lives of millions. For more information, visit www.DLHcorp.com.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Results. Revenue in the first quarter was $97.9 million versus $72.7 million last year, but lower than our estimate of $101 million. Net income was at $2.2 million, or $0.15 per diluted share, compared to $1.5 million, or $0.11, in the prior year. EBITDA for the quarter was $11.1 million compared to $6.3 million last year. We had estimated EBITDA of $11.3 million, adjusted EBITDA of $11.8 million, and EPS of $0.12.

Other Key Indicators. DLH generated $5.1 million in operating cash for the quarter, with cash being at $0.1 million as of December 31, 2023. The Company backlog for the quarter was $653.5 million, including funded backlog of approximately $132.3 million and unfunded backlog of $521.2 million, versus $704.8 million in the prior year. 


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

AZZ Inc. (AZZ) – Estimates and target raised to reflect higher margins and peer group comps.

Posted on by cpereira@noblefcm.com


Thursday, January 25, 2024

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Fiscal third quarter results continued AZZ’s upward trend. AZZ reported strong results in the third quarter as sales continued to expand and operating margins increased. While there was a nonrecurring boost to AZZ’s nonconsolidated division, that should not take away from favorable results at AZZ’s Metal Coating and Precoat Metals divisions. We look for top-line growth to continue at a 2-3% rate and for EBITDA margins to continue to expand towards 25% with a continued shift toward the higher-margin Metal Coating division.

Coating company stocks have risen in recent months. The DJIA has risen 14% in the last three months. AZZ’s increase of 33% over that time period leads its coating peer group, but other stocks such as Chemours (CC) and Sherwin-Williams (SHW) have also risen more than 25%. As a result, the peer group median forward P/E has risen to 17 times from 15 times and the median EV/EBITDA has increased to 13 times from 10 times.


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

DLH Holdings (DLHC) – Reports Key Metrics for Fiscal 2023 Year End

Posted on by cpereira@noblefcm.com


Wednesday, October 25, 2023

DLH delivers improved health and readiness solutions for federal programs through research, development, and innovative care processes. The Company’s experts in public health, performance evaluation, and health operations solve the complex problems faced by civilian and military customers alike, leveraging digital transformation, artificial intelligence, advanced analytics, cloud-based applications, telehealth systems, and more. With over 2,300 employees dedicated to the idea that “Your Mission is Our Passion,” DLH brings a unique combination of government sector experience, proven methodology, and unwavering commitment to public health to improve the lives of millions. For more information, visit www.DLHcorp.com.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Key Metrics. Yesterday, DLH Holdings released some key metrics for the fiscal year ended September 30, 2023. The Company expects to release full audited financial results on December 6th. We will update our models following the full release.

Revenue. The preliminary 4Q23 revenue estimate is $100 million, which would be below our $103 million estimate and the $104 million consensus estimate, up from $67.2 million in 4Q22. The increase was driven by the GRSi acquisition. The legacy contract portfolio grew modestly. We believe the slow roll out of work under recently won ID/IQs negatively impacted quarterly revenue growth. 


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

AZZ Inc. (AZZ) – Model Adjustments

Posted on by cpereira@noblefcm.com


Tuesday, October 24, 2023

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

We have updated our models to reflect reported August quarter financial results. We are fine tuning our models to reflect August quarter results. We have raised our sales projections modestly to reflect anticipated growth in the Precoat division in the February quarter, typically the weakest quarter for the company. We now project Precoat sales and overall sales in the fourth quarter of $195 million and $345 million, respectively.

We have trimmed margins a bit. We have lowered our gross margin and EBITDA margin assumptions for the third and fourth quarter. Our margin assumptions now show improvement over previous year results, but now allow for a decrease in margins in the winter quarters relative to the summer quarters to reflect lower sales.


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

AZZ Inc. (AZZ) – Sales a bit light, but margins are holding steady.

Posted on by cpereira@noblefcm.com


Thursday, October 12, 2023

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Sales growth stagnated. 2024-2Q sales decreased 1.9% (Metal Coatings up 2.4% and Precoat Metals down 5.0%) due to a soft market for precoated construction and appliances. Management remains optimistic that sales growth will resume pointing to rising new home startups and the AIIJ Act.

EBITDA margins held steady despite the sale decline. Metal Coatings maintained an EBITDA margin above 30% and Precoat Metals held its EBITDA margin near 20%. Importantly, the company has been making a concerted effort to reduce customer inventories. Lower inventories has helped reduce costs and improved cash flow leaving the company well positioned for seasonal sales declines during the winter months.


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

AZZ Inc. (AZZ) – Initiating Coverage With an Outperform Rating and $60 Price Target

Posted on by cpereira@noblefcm.com


Monday, August 21, 2023

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

AZZ Inc. is North America’s largest independent hot-dip galvanizing and coil coating solution company. AZZ has two operating divisions – Metal Coatings and Precoat Metals. Metal Coatings provides a wide range of high-quality metal finishing and coating services that protect from the destruction of metallic corrosion including galvanizing and other forms of coating and plating. Precoat Metals is engaged in the growing use of coil coated metal, often referred to as prepainted metal because the metal is painted prior to, rather than after, fabrication. 

The shares of AZZ trade at a sharp discount to other coating companies. We believe the discount also reflects a more leveraged balance sheet following recent acquisitions. Positive free cash flow will allow the company to pay down debt. As the company deleverages, we believe it will see valuation multiples rise to levels approaching peer companies.


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

DLH Holdings (DLHC) – Post Call Commentary: Ready to Pounce

Posted on by cpereira@noblefcm.com


Friday, August 04, 2023

DLH delivers improved health and readiness solutions for federal programs through research, development, and innovative care processes. The Company’s experts in public health, performance evaluation, and health operations solve the complex problems faced by civilian and military customers alike, leveraging digital transformation, artificial intelligence, advanced analytics, cloud-based applications, telehealth systems, and more. With over 2,300 employees dedicated to the idea that “Your Mission is Our Passion,” DLH brings a unique combination of government sector experience, proven methodology, and unwavering commitment to public health to improve the lives of millions. For more information, visit www.DLHcorp.com.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Standing Ready. With its acquisitions of S3, IBA, and, most recently GRSi, DLH has truly morphed into a one stop shop platform to address a broader range of client’s solution needs with expertise in science, research and development, systems engineering, and integration.

Promising Pipeline. Although the contract award environment continues to experience some headwinds, there does appear to be some movement both with anticipated proposals from previously won ID/IQ contracts as well as normal ongoing business. Overall, we believe there is significant demand from its clients for the services DLH provides.


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

DLH Holdings (DLHC) – Better Than Expected Third Quarter Results

Posted on by cpereira@noblefcm.com


Thursday, August 03, 2023

DLH delivers improved health and readiness solutions for federal programs through research, development, and innovative care processes. The Company’s experts in public health, performance evaluation, and health operations solve the complex problems faced by civilian and military customers alike, leveraging digital transformation, artificial intelligence, advanced analytics, cloud-based applications, telehealth systems, and more. With over 2,300 employees dedicated to the idea that “Your Mission is Our Passion,” DLH brings a unique combination of government sector experience, proven methodology, and unwavering commitment to public health to improve the lives of millions. For more information, visit www.DLHcorp.com.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

3Q Results. DLH posted revenue of $102.2 million from $66.4 million last year. Excluding FEMA (negative $5.1 million impact), revenue last year was $71.6 million. GRSi contributed $34.4 million towards revenue which indicates core business decreasing $3.8 million y-o-y. Net income for DLH was $1.7 million, or $0.12 per diluted share, compared to $4.9 million, or $0.34 per share, last year. EBITDA was at $11.4 million versus $9.0 million in the prior year. We had estimated revenue of $102 million, adjusted EBITDA of $11 million, and EPS of $0.10.

Other Key Indicators. DLH produced $15.0 million in operating cash in the quarter and had cash of $0.5 million and debt outstanding under its credit facilities of $195.8 million as of June 30, 2023. The Company paid off $8.4 million of debt from the previous quarter, and the Company lowered the range on its pace to reduce its total debt balance to between $185.0-$187 million from $185.0-$190 million by the end of this fiscal year.


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

DLH Holdings (DLHC) – Post Call Update

Posted on by cpereira@noblefcm.com


Friday, May 05, 2023

DLH delivers improved health and readiness solutions for federal programs through research, development, and innovative care processes. The Company’s experts in public health, performance evaluation, and health operations solve the complex problems faced by civilian and military customers alike, leveraging digital transformation, artificial intelligence, advanced analytics, cloud-based applications, telehealth systems, and more. With over 2,300 employees dedicated to the idea that “Your Mission is Our Passion,” DLH brings a unique combination of government sector experience, proven methodology, and unwavering commitment to public health to improve the lives of millions. For more information, visit www.DLHcorp.com.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Timing. As we suspected, the top line miss was more a reflection of contract timing, as some awards have been pushed out to the right. We are not concerned as we expect the business eventually will come in. We would point out continued growth in the VA mail order business, with the $20.2 million of revenue in the quarter up 18.1% y-o-y.

Mix. The lower than projected EPS was driven by two items: lower margin than we had expected, mostly due the mix of business in the quarter, and higher interest expense, mostly due to the higher interest rate environment impact on DLH’s variable rate debt.


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

DLH Holdings (DLHC) – Releases 2Q23 Results

Posted on by cpereira@noblefcm.com


Thursday, May 04, 2023

DLH delivers improved health and readiness solutions for federal programs through research, development, and innovative care processes. The Company’s experts in public health, performance evaluation, and health operations solve the complex problems faced by civilian and military customers alike, leveraging digital transformation, artificial intelligence, advanced analytics, cloud-based applications, telehealth systems, and more. With over 2,300 employees dedicated to the idea that “Your Mission is Our Passion,” DLH brings a unique combination of government sector experience, proven methodology, and unwavering commitment to public health to improve the lives of millions. For more information, visit www.DLHcorp.com.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

2QFY23 Results. DLH reported revenue of $99.4 million compared to $68.9 million the year prior, excluding FEMA contract contribution. GRSi contributed $32.6 million of revenue, indicating the core DLH business saw revenue decline $2.1 million y-o-y. Net income was reported at $0.8 million, or $0.06 per diluted share, versus $7.2 million, or $0.50, last year. EBITDA was at $10.5 million compared with $12.1 million last year, or $6.6 million excluding FEMA.

Focusing In. Although revenue came in lower than our expected $104 million, we believe this to be more a function of some business moving to the right and the challenge in estimating the recently acquired GRSI business. We do not believe the “miss” indicates a deterioration of the core business. We continue to believe the new DLH has significant growth opportunities. The Company has noted multiple cross selling opportunities, with a recent example being the award given by the National Cancer Institute’s Center for Biomedical Informatics and Information Technology for IT services.


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.