Atkore Inc. (ATKR) — Under Priced With Compelling Growth Factors
Atkore shares moved 30.5% over the last 52 weeks, with a high of $154.86 and a low of $70.5. During this time, the stock outperformed the S&P 500 index by 34.0%. As of April 2023, the company's 50-day average price is $138.65. Atkore Inc. engages in the manufacture and sale of electrical, safety, and infrastructure products in the United States and internationally. The mid-cap Technology company has 4,000 full time employees and is based in Harvey, IL. Atkore has not offered any dividends in the last year.
The Company Has a Positive Net Current Asset Value:
| 2019-09-30 | 2020-09-30 | 2021-09-30 | 2022-09-30 | |
|---|---|---|---|---|
| Revenue | $1,916,538 | $1,765,421 | $2,928,014 | $3,913,949 |
| Gross Margins | 25.9% | 27.8% | 38.4% | 41.9% |
| Operating Margins | 11.7% | 13.6% | 27.3% | 31.5% |
| Net Margins | 7.26% | 8.63% | 20.08% | 23.34% |
| Net Income | $139,051 | $152,302 | $587,857 | $913,434 |
| Interest Cost | -$50,473 | -$40,062 | -$32,899 | -$30,676 |
| Depreciation & Amort. | -$72,347 | -$89,273 | -$93,072 | -$98,331 |
| Earnings Per Share | $2.83 | $3.1 | $12.19 | $19.0 |
| Diluted Shares | 47,777 | 48,044 | 47,306 | 39,505 |
| Free Cash Flow | $174,834 | $214,992 | $508,428 | $651,059 |
| Capital Expenditures | -$34,860 | -$33,770 | -$64,474 | -$135,776 |
| Net Current Assets | -$504,522 | -$351,439 | $76,089 | $103,611 |
| Current Ratio | 2.43 | 3.0 | 2.71 | 2.89 |
| Long Term Debt | $845,317 | $803,736 | $758,386 | $760,537 |
| Net Debt / EBITDA | n/a | 1.61 | 0.21 | 0.29 |
A Lower P/B Ratio Than Its Sector Average but Trades Above Its Graham Number:
Compared to the Technology sector's average of 27.16, Atkore has a trailing twelve month P/E ratio of 7.3 and, according to its EPS guidance of $16.45, an expected P/E ratio of 8.4. Atkore's PEG ratio is 0.17 based on its 42.2% compound average growth rate of historical and projected earnings per share. We also consider the weighted average of the company's EPS growth rate and the projected growth rate for the broader market, which in Atkore's case is 11.1%. This normalized growth rate gives us a PEG ratio of 0.65, which still suggests that company's shares are possibly undervalued. Furthermore, Atkore is possibly undervalued in terms of its book value because its P/B ratio is 4.06 compared to its sector average of 6.23. As of the date of publication, the company's shares are trading 59.1% above their Graham number of $81.72.
There's an Analyst Consensus of Strong Upside Potential for Atkore:
5 analysts are following Atkore and have set target prices ranging from $156.0 to $185.0 per share. On average, they have given the company a rating of buy. At the current price of $138.65, ATKR is trading -18.3% away from its average analyst target price of $169.8 per share, implying an analyst consensus of strong upside potential for the stock. The company has an average amount of shares sold short since 7.9% of the company's shares are tied to short positions. Institutions own 101.7% of Atkore's shares, while the insider ownership rate stands at 0.8%. which is a small amount of insider investors. The company's biggest shareholder is the Vanguard Group, Inc. with a 12% stake in the company worth $600,399,410.
