ARKO Corp. Reports Disappointing Earnings, Challenges Ahead
Quarterly Earnings Fall Short of Expectations
ARKO Corp. (ARKO) has released its quarterly earnings, reporting $0.07 per share. This figure falls short of the Zacks Consensus Estimate of $0.16 per share and is lower than the $0.17 per share reported a year earlier. These earnings figures are adjusted for non-recurring items.
This earnings report reflects a significant surprise of -56.25%. In the previous quarter, ARKO was expected to earn $0.18 per share but actually posted earnings of $0.11, resulting in a surprise of -38.89%.
Revenue Misses Expectations as Market Struggles
Over the last year, the company has exceeded consensus EPS estimates just once. In terms of revenue, ARKO generated $2.28 billion for the quarter ending September 2024, which missed the Zacks Consensus Estimate by 6.12%. This amount is also a decline from $2.62 billion reported last year. Over the past four quarters, ARKO has consistently failed to meet revenue estimates.
Looking ahead, the stock’s short-term performance will largely depend on management’s insights during the earnings call.
Since the start of the year, ARKO shares have decreased by about 14.7%, while the S&P 500 has gained 24.3%.
Future Prospects: What Lies Ahead for ARKO?
Despite ARKO’s underperformance in 2023, investors are keen to know what the future holds for the stock.
While there are no easy answers, a critical measure for assessing future performance is the company’s earnings outlook. This outlook includes current consensus earnings expectations for upcoming quarters and how recent revisions have influenced these expectations.
Research shows a strong relationship between short-term stock movements and trends in earnings estimate revisions. Investors can track these revisions independently or use a proven rating system like the Zacks Rank, which has shown effectiveness in predicting stock movements.
Before this earnings release, the revision trends for ARKO were mixed. Although the direction of revisions may shift following this latest report, the present status gives ARKO a Zacks Rank of #3 (Hold), indicating the stock is expected to perform in line with the market for the near future. You can view today’s Zacks #1 Rank (Strong Buy) stocks for further insights.
It will be interesting to see how estimates for the next quarters and the current fiscal year evolve in the coming days. The current consensus EPS estimate stands at $0.06 with projected revenues of $2.29 billion for the next quarter, while the full-year estimate is $0.31 on $9.18 billion in revenues.
Investors should be aware that the industry outlook can significantly impact ARKO’s stock performance. Currently, the Consumer Products – Staples sector is ranked in the bottom 20% of over 250 Zacks industries. Historical data indicates that stocks from the top half of Zacks-ranked industries typically outperform those in the bottom half by a ratio of more than 2 to 1.
Upcoming Earnings from Rivals
Another company in the same industry, Leslie’s, Inc. (LESL), has yet to announce its quarterly results for September 2024.
Leslie’s is projected to report quarterly earnings of $0.11 per share, representing a year-over-year decline of 21.4%. Over the past month, the EPS consensus estimate for Leslie’s has remained stable.
The expected revenue for Leslie’s is $402.61 million, down 6.9% compared to the previous year.
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