Matrix Service Exceeds Q4 Expectations But Stock Drops

Key Metrics

* Revenue: $187.2 million (6.9% YoY growth)
* Adjusted EPS: -$0.20 (11.1% beat)
* Adjusted EBITDA: -$2.18 million (42.7% beat)
* Full-year revenue guidance: $875 million (4.3% below estimates)
* Operating Margin: -3.4%
* Free Cash Flow Margin: 17.5%
* Market Capitalization: $389.2 million

Company Overview

Matrix Service (NASDAQ:MTRX) offers engineering, fabrication, construction, and maintenance services primarily to the energy and industrial markets.

Sales Growth

* Sales declined at a 12.9% annual rate over the last five years.
* Annualized revenue declines of 4.7% over the last two years.
* Q4 revenue growth of 6.9%, exceeding analyst estimates by 1.1%.
* Analysts expect revenue growth of 38.3% over the next 12 months.

Operating Margin

* Average operating margin of negative 5.1% over the last five years.
* Operating margin decreased by 4.5 percentage points over the last five years.
* Q4 operating margin of negative 3.4%.

Earnings Per Share (EPS)

* EPS declined by more than revenue over the last five years, at an annual rate of 24.5%.
* Two-year annual EPS growth of 16%.
* Q4 EPS of negative $0.20, down from negative $0.18 last year, but beating analyst estimates.
* Analysts forecast full-year EPS of negative $1.20 to flip positive to $0.68.

Key Takeaways

* Matrix Service exceeded analyst EBITDA expectations.
* EPS outperformed Wall Street estimates.
* Full-year revenue guidance missed significantly, impacting share price (-14.7%).
* Valuation, business qualities, and recent performance should be considered before investing.