Core & Main (CNM, Financial) saw a significant decline in its stock price this week, dropping nearly 21%. The stock is currently priced at $38.05, reflecting a modest 0.13% price change according to the latest data.
The decline followed the company's second-quarter earnings report, which was released before the market opened on Wednesday. Core & Main reported a 6% increase in sales to $1.96 billion and an 8% rise in net income to $119 million, or $0.61 per share. However, both figures were below average analyst estimates.
Additionally, Core & Main management lowered its full-year revenue guidance, citing weather disruptions and other factors as reasons for its underperformance.
Following the earnings report, several analysts reduced their price targets for Core & Main. Notably, Truist's Keith Hughes downgraded his price target from $50 to $38, while maintaining a hold recommendation. Hughes cited "unusual" weakness in the company's municipal client segment as well as the negative market reaction to the guidance reduction.
Analyzing the stock further, Core & Main's (ticker: CNM) GF Value stands at $35.93, indicating that the stock is fairly valued at its current price. For more details, refer to the GF Value page.
Despite this, the company presents several financial strengths. Core & Main's Beneish M-Score of -2.75 suggests it is unlikely to be a manipulator. Additionally, the operating margin is expanding, which is generally a positive indicator.
However, there are also some warning signs. Its Altman Z-score of 2.87 places it in the grey area, indicating some degree of financial stress. Furthermore, the company has been issuing new debt and has insider selling transactions with no corresponding insider buying over the past 3 months.
Core & Main operates with a P/E ratio of 17.76 and an EV/EBITDA of 11.17, both in the middle range for its industry. The stock's market cap is $7.33 billion, and its recent trading volume reached 800,587 shares.
Investors should keep an eye on Core & Main's future performance, especially considering the company's revised guidance and current market conditions. While the stock shows some promising signs, caution is warranted due to its financial stress indicators and the recent earnings miss.
