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Tuesday, September 22, 2020

Is Now the Time to Invest in Summit Materials Inc. (NYSE:SUM)?

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The Summit Materials Inc. (SUM) shares are trading at lower $15.85 and the avg recommendation for the stock is Moderate Buy. while the current analyst price target stands at $21.32.

To add more color to this target, the company’s high over the last year is $25.22 and the low is $7.51. Over the last 52 weeks, SUM is down -37.15% while the S&P 500 is down -0.63%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, SUM reported a profit of $220.85 million. Summit Materials Inc. also saw revenues increase to $631.01 million. In addition, SUM has free cash flow of -$44.02 million as of 06-2020. The company’s EBITDA came in at $156.06 million which compares well with its peers.

SUM booked profit margins of 2.60%, its Return on Equity (ROE) is 4.30%, and its Return on Assets is 1.50%. All told, it is clear that, SUM needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. SUM has a short ratio of 8.26 and outstanding shares of 113.60M.

Company Outlook

SUM has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 1.75 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 0.90. Summit Materials Inc. SUM also noted assets of $4.11 billion at the end of the last quarter. Investors should also keep an eye on sector updates as SUM has historically followed its peers on positive news.

All told, Summit Materials Inc. SUM has strung together solid data and demonstrated underlying fundamentals. At its current valuation, SUM represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Summit Materials Inc. SUM is now commanding a market cap of 1.88B and a float of 113.52M. SUM is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of SUM stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in SUM, either long or short, and we have not been compensated for this article.

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