ARKO Corp. Reports Mixed Earnings, Faces Challenges Ahead
Earnings Miss Estimates, Revenue Decline Noted
ARKO Corp. (ARKO) reported quarterly earnings of $0.07 per share, which fell short of the Zacks Consensus Estimate of $0.16 per share. This is a decline from earnings of $0.17 per share a year ago, with all figures adjusted for non-recurring items.
The earnings missed expectations by 56.25%. A quarter earlier, the company anticipated earnings of $0.18 per share but delivered only $0.11, resulting in a surprise of -38.89%.
Over the past year, ARKO has met consensus EPS estimates only once in four quarters.
As part of the Zacks Consumer Products – Staples industry, ARKO reported revenues of $2.28 billion for the quarter ending September 2024. This figure also missed the Zacks Consensus Estimate by 6.12%, compared to revenues of $2.62 billion in the same quarter last year. ARKO has consistently failed to meet revenue estimates over the previous four quarters.
The stock’s future price movements will largely depend on management’s insights during the upcoming earnings call.
Year-to-date, ARKO shares have decreased by about 14.7%, while the S&P 500 has risen by 24.3%.
What Lies Ahead for ARKO?
Investors are pondering the future for ARKO, especially given its underperformance this year.
While straightforward answers are elusive, observing the company’s earnings outlook can provide insights. This outlook reflects both current consensus earnings expectations and any adjustments that have occurred recently.
Research has indicated a strong link between stock movements and changes in earnings estimate revisions. Investors can track these revisions independently or utilize a tool like the Zacks Rank, known for successfully leveraging earnings estimate changes.
Leading up to this earnings release, revisions for ARKO have been mixed. Although the figures may shift following this report, the current standings suggest a Zacks Rank of #3 (Hold), indicating the stock is likely to perform in line with the market shortly. You can access the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
It will be significant to monitor how future earnings estimates adjust in the coming days. The current consensus estimates are $0.06 for EPS with revenues of $2.29 billion for the next quarter, and $0.31 for EPS with revenues of $9.18 billion for the current fiscal year.
Industry health can also significantly influence stock performance. Currently, the Consumer Products – Staples sector ranks in the bottom 20% of over 250 Zacks industries. Research indicates that the top 50% of Zacks-ranked industries typically outperform the bottom half by more than 2 to 1.
Leslie’s, Inc. (LESL), another player in the same sector, has yet to report its results for the quarter ending September 2024.
This company is projected to post quarterly earnings of $0.11 per share, reflecting a year-over-year drop of 21.4%. The consensus EPS estimate for this quarter has not changed over the past 30 days.
Leslie’s, Inc. is expected to generate revenues of $402.61 million, down 6.9% from the same quarter last year.
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The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
