MasterCraft Boat Holdings, Inc. (MCFT) reported a quarterly loss of $0.04 per share for the period ending June 2024. While this exceeded the Zacks Consensus Estimate of a loss of $0.22, it represents a significant decline from the earnings of $1.37 per share reported in the same period last year. These figures are adjusted for non-recurring items. The company’s earnings surprise of 81.82% for the quarter marks a continuation of its recent trend of exceeding expectations. In the previous quarter, MasterCraft surpassed estimates by 60.87%, delivering earnings of $0.37 per share against an expected $0.23. Over the past four quarters, the company has consistently outperformed consensus EPS estimates.
Despite the positive earnings surprise, MasterCraft’s revenue for the quarter, at $67.18 million, fell short of the year-ago revenue of $166.57 million. However, the company did surpass the Zacks Consensus Estimate for revenue by 5.54%, marking the fourth consecutive quarter of exceeding revenue expectations. While the current earnings report indicates some positive performance, the future outlook for MasterCraft remains uncertain. The company’s stock has underperformed the market, losing about 12.3% since the beginning of the year compared to the S&P 500’s gain of 17.2%.
To assess the stock’s future trajectory, investors should consider the company’s earnings outlook, which includes current consensus earnings expectations for upcoming quarters and how these expectations have changed recently. Historical data suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions. The Zacks Rank, a rating tool that leverages the power of earnings estimate revisions, provides valuable insights into this correlation.
Prior to the release of the latest earnings report, the estimate revisions trend for MasterCraft was unfavorable. While these revisions could change following the report, the current status translates into a Zacks Rank #5 (Strong Sell) for the stock. This indicates that the shares are expected to underperform the market in the near future. It will be interesting to see how estimates for the coming quarters and the current fiscal year evolve in the coming days. The current consensus EPS estimate stands at $0.05 on $78 million in revenues for the next quarter and $1.41 on $382.71 million in revenues for the current fiscal year.
Investors should also be mindful of the broader industry outlook, which can significantly impact the performance of the stock. The Leisure and Recreation Products industry, to which MasterCraft belongs, is currently ranked in the bottom 7% of the 250+ Zacks industries. Research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Another company in the same industry, American Outdoor Brands, Inc. (AOUT), is expected to report results for the quarter ended July 2024 on September 5. The company is expected to post a quarterly loss of $0.03 per share, representing a year-over-year change of -400%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. American Outdoor Brands’ revenues are expected to be $40.5 million, down 6.8% from the year-ago quarter.
