Don't Judge Atkore on Technicals Alone - Check Its Fundamentals!

Atkore logged a 1.8% change during today's overnight session, and is now trading at a price of $116 per share. The S&P 500 index moved -0.4% and the Nasdaq posted a -1.4% change. ATKR's trading volume is 258,905 compared to the stock's average volume of 493,973.

Over the last 52 weeks, the stock moved 0.3%, with a high of $128.36 and a low of $70.5. During this time, the stock underperformed the S&P 500 index by 20.1%. Atkore Inc. engages in the manufacture and sale of electrical, safety, and infrastructure products in the United States and internationally. The mid-cap Industrials company has 4,000 full time employees and is based in Harvey, IL. Atkore has not offered any dividends in the last year.

Snapshot of the Company's Financials:

2019-09-30 2020-09-30 2021-09-30 2022-09-30
Revenue (MM) $1,917 $1,765 $2,928 $3,914
Revenue Growth n/a -7.9% 65.8% 33.7%
Gross Margins 25.94% 27.83% 38.44% 41.9%
Gross Margins Growth n/a 7.29% 38.12% 9.0%
Operating Margins 11.67% 13.57% 27.29% 31.52%
Operating Margins Growth n/a 16.28% 101.11% 15.5%
Earnings Per Share $2.83 $3.1 $12.19 $20.3
EPS Growth n/a 9.54% 293.23% 66.53%
Free Cash Flow (MM) $175 $215 $508 $651
FCF Growth n/a 22.97% 136.49% 28.05%
Capital Expenditures (MM) $-35 $-34 $-64 $-136
Net Debt / EBITDA 2.42 1.62 0.22 0.29

Basic Valuation Metrics Show Atkore Is Undervalued:

Compared to the Industrials sector's average of 21.46, Atkore has a trailing twelve month price to earnings (P/E) ratio of 5.7 and, based on its Eps guidance of 15.12, an expected P/E ratio of 7.7. The firm's price to earnings growth (PEG) is -3.14, which indicates that the company is undervalued in terms of its expected earnings growth. Atkore's price to book (P/B) ratio is 3.8 compared to its sector average of 3.7.

As of the date of publication, the company is trading -1.1% below its Graham number, implying there is a margin of safety for the stock. We calculate the Graham number as follows:

√(22.5 * TTM earnings per share * book value per share) = √(22.5 * 20.25 * 30.224) = $117.35

There is Mixed market sentiment About Atkore:

4 analysts are following Atkore and have set target prices ranging from $135 to $150 per share. On average, they have given the company a rating of buy. At today's prices, ATKR is trading -18.17% away from its average analyst target price of $141.75 per share, implying an analyst consensus of some upside potential for the stock.

The company has an average amount of shares sold short since 6.7% of the company's shares are tied to short positions. Institutions own 106.5% of Atkore's shares, while the insider ownership rate stands at 0.83%. The biggest shareholder is the Vanguard Group, Inc. with a 11.94% stake in the company worth approximately $552,109,192.00.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.