Tag: Specialty Business Services

AZZ Inc. (AZZ) – Tempering Our Expectations; Rating Remains an Outperform

Posted on by cpereira@noblefcm.com


Friday, October 11, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

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

Second quarter financial results. For the fiscal year (FY) 2025, AZZ reported second quarter adjusted net income of $41.3 million or $1.37 per share compared to $37.2 million or $1.27 per share during the prior year period and our estimate of $40.8 million or $1.35 per share. AZZ maintained its FY 2025 sales guidance range of $1.525 billion to $1.625 billion, lifted the lower end of adjusted EBITDA to a range of $320 million (from $310 million) to $360 million, and increased adjusted diluted EPS expectations to a range of $4.70 to $5.10 from $4.50 to $5.00.

Updating estimates. We have lowered our 2025 EBITDA and EPS estimates to $343.0 million and $4.95, respectively, from $350.3 million and $5.00. Our estimates reflect seasonality in the second half of the year. Our 2026 EBITDA and EPS estimates have been reduced to $361.2 million and $5.45, respectively, from $366.8 million and $5.70. Our 2026 estimates reflect a slower ramp in revenue from the new facility under construction in Washington, Missouri.


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*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) – Second Quarter Financial Results Exceed Expectations

Posted on by cpereira@noblefcm.com


Thursday, October 10, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

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

Second quarter financial results. For the fiscal year (FY) 2025, AZZ reported second quarter adjusted net income of $41.3 million or $1.37 per share compared to $37.2 million or $1.27 per share during the prior year period and our estimate of $40.8 million or $1.35 per share. Adjusted EBITDA increased 4.4% to $91.9 million, roughly in line with our estimate, representing 22.5% of sales versus 22.1% of sales during the second quarter of FY 2024. While sales of $409.0 million were modestly below our $410.5 million estimate, AZZ generated a 25.3% gross margin as a percentage of sales compared to 24.4% during the prior year period and our estimate of 24.4%. AZZ maintained its FY 2025 sales guidance range of $1.525 billion to $1.625 billion, lifted the lower end of adjusted EBITDA to a range of $320 million (from $310 million) to $360 million, and increased adjusted diluted EPS expectations to a range of $4.70 to $5.10 from $4.50 to $5.00.

Debt reduction. During the first half of FY25, AZZ generated operating cash flow of $119.4 million and reduced debt by $45 million. Management expects to reduce debt by at least $100 million during the fiscal year compared to prior expectations of $60 million to $90 million. At quarter end, the company’s net leverage was 2.7x trailing twelve months EBITDA and cash and cash equivalents amounted to $2.2 million.


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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) – Highlights from the Noble Virtual Basic Industries Equity Conference.

Posted on by cpereira@noblefcm.com


Thursday, September 26, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

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

New manufacturing facility is on schedule and on budget. AZZ Inc. participated in Noble’s Virtual Basic Industries Conference on September 25. AZZ is the leading independent provider of hot-dip galvanizing and coil coating solutions to a broad range of end markets. With AZZ Precoat Metals’ new manufacturing facility in Washington, Missouri expected to be completed in fiscal year 2025, we expect the facility to contribute to top-line growth in fiscal year 2026 while capital expenditures decline. Approximately 75% of the facility’s production is already committed that we estimate could generate approximately $50 million to $60 million in revenue. A link to the presentation replay is here.

Declining debt balance and cost of capital. Based on the company’s strong first quarter fiscal year 2025 results and outlook, we have assumed AZZ will pay down $90 million of debt this fiscal year, or at the high end of the guidance range. On September 24, AZZ executed a fourth amendment to its existing credit agreement and reduced the interest rate of the Term Loan B by 75 basis points to the Adjusted Term Secured Overnight Financing Rate (SOFR) plus 250 basis points.


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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) – Upgrading to Outperform Based on Strengthening Cash Flow Profile and Outlook

Posted on by cpereira@noblefcm.com


Tuesday, June 11, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

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

Upgrading our rating to Outperform. We have raised our investment rating to Outperform based on an increasingly favorable cash flow growth profile. With the new greenfield plant construction in Washington, Missouri expected to be completed in fiscal year 2025, we expect the facility to contribute to top-line growth while capital expenditures associated with organic growth initiatives could decline in fiscal year 2026. Once its effort to deleverage the balance sheet is complete, we think AZZ could more aggressively pursue acquisitions to enable the company to expand geographically and broaden its product and service offerings.

New manufacturing facility in Washington, Missouri. AZZ Precoat Metals’ new 250,000 square foot manufacturing facility is expected to contribute to earnings beginning in fiscal year 2026. Approximately 75% of the facility’s production is already committed that we estimate could generate approximately $60 million in revenue. We expect EBITDA margins to be at the high end of the company’s stated 17% to 22% range for the precoat metals segment.


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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) – In a Better Environment

Posted on by cpereira@noblefcm.com


Friday, May 03, 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.

Government Budgets. With the budgets for the 2024 fiscal year passed, DLH is prepared to capitalize on the expected increased bidding environment, in our view. The Company has roughly $500 million in outstanding bids, and we expect to see awards to be announced throughout the fiscal year.

Increasing Cash Flow. The Company generated $10.3 million in cash from operations year-to-date, above 2023’s cash generation of $6.9 million. The result is from an improvement in the Company’s Day Sales Outstanding, which improved to 50 days from 61 days last year. Improved cash collections corresponds to quicker debt reduction, in our view.


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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) – A Look into the Second Quarter

Posted on by cpereira@noblefcm.com


Thursday, May 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.

Past the Continuing Resolution. With the Continuing Resolution in the rear view mirror and building momentum in government decision making, DLH is positioned to realize any opportunities for awards throughout 2024, in our view. With the more positive environment, DLH already experienced an increase in its backlog, up $80 million sequentially, and we believe there is still more to come.

2Q Results. Revenue for the second quarter was $101.0 million, an increase from $99.4 million last year and above our estimate of $99 million. Net income totaled $1.8 million, or $0.12 per diluted share, versus $0.8 million, or $0.06 per diluted share, for 2Q23 and in-line with our estimate. EBITDA for 2Q24 was approximately $10.2 million versus $10.5 million in the prior year, or a margin of 10.1% and 10.5%, respectively, slightly below our $11.3 million projection.


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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) – Fiscal 2024 4Q and year results meet expectations

Posted on by cpereira@noblefcm.com


Tuesday, April 23, 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.

Seasonal decline was less due to warm weather. Precoat Metals reported strong results as construction sale benefitted from warm weather. Appliance sales were also strong.

Margins continue to improve steadily as increased sales are spread over fixed costs. Consolidated margins dipped slightly with the shift towards lower-margin Precoat Metal sales, but the overall trend continues to rise.


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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 raises guidance. We raised our numbers two weeks ago.

Posted on by cpereira@noblefcm.com


Tuesday, April 09, 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.

AZZ raised its FY 2025 guidance. Management increased its estimated sales, adjusted EBITDA, and adjusted diluted EPS by 15-20%. The increase incorporates a $4.5-$5.0 million reduction in financing costs due to the repricing of AZZ’s Term Loan B. It also reflects an expected improvement in results from AZZ’s partially spun off AIS division (40% owned and treated as other income). Management expects $15-$18 million of other income in FY 2025, up from the $13 million we have assumed for FY 2024 (reporting 4/22).

AIS growth reflects increased activity in the Electrical Infrastructure business units. Increased use of data centers, electric grid improvements, and general growth in manufacturing is leading to increased sales. We view higher results as sustainable and have raised our other income estimate for the years beyond FY 2025..


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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) – Another CMOP Update

Posted on by cpereira@noblefcm.com


Tuesday, March 26, 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.

More Changes? The Veterans Administration appears to be making more changes to the Consolidated Mail Outpatient Pharmacy contract process. The procurements were set-aside for a service-disabled veteran owned small business as the prime contractor with each of the eight procurements being evaluated separately for 5-year contracts. On March 14th, the VA issued a notice for services for durations of up to three months.

Background. In an extended process, the VA is again seeking to complete a re-bid and award of the CMOP contracts. In January 2023 DLH and other parties submitted bids for the eight separately competed procurements pertaining to the program. Recall, DLH has operated under a series of “bridge” contracts since 2016. Most recently, the VA extended these contracts through April 30, 2024.


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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) – Stock due for a pause after recent strength, rating lowered

Posted on by cpereira@noblefcm.com


Friday, March 22, 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.

We are lowering our rating on the shares of AZZ to Market Perform with the stock solidly above our price target. The shares of AZZ have risen sharply in recent months and now trade above our $75 price target. At current prices, the shares trade at 16 times our recently raised fiscal 2025 earnings estimate, a multiple similar to its peers. Our investment premise for the shares of AZZ had been that its multiples would expand as the company’s balance sheet improved. This has largely come true.

A Market Perform rating does not mean we think the stock wont continue to rise. The company continues to report favorable results and lay the foundation for future growth. Construction of a new factory is nearing completion and financing costs are decreasing. A recent debt refinancing is expected to reduce financing costs by $5 million allowing us to raise our fiscal 2025 earnings estimate. With sales growing at a 3-5% rate and margins rising with a shift towards AZZ’s Metal Coating business, we expect solid earnings growth over the next few years.


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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) – NCI Award

Posted on by cpereira@noblefcm.com


Friday, March 08, 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.

NCI Award. DLH Holdings has been awarded a contract to continue and expand its user-experience, technology refresh, and IT services for the National Institutes of Health’s (“NIH”) National Cancer Institute (“NCI”), the largest institute under NIH. This new award extends DLH’s longstanding partnership with NCI’s Center for Biomedical Informatics and Information Technology (“CBIIT”) by providing scientific computing and informatics to support NCI’s research mission.

CBIIT Blanket. The contract was competitively awarded through the multiple-award blanket purchase agreement with CBIIT that the Company announced in February 2023. Including the base period and all option periods, the contract has a value of approximately $52 million over a performance period of five and a half years. Furthermore, the award includes provisions for an additional $86 million in optional IT services. If fully exercised, the potential maximum contract value would be $138 million.


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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) – 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.


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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.


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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.