2024-04-08 16:39:10 ET
Summary
- ATKR has done exceedingly well over the past year, generating 51% in returns and outperforming its peers, but now we feel some caution may be warranted.
- ATKR's prospects typically lag non-residential construction activity, and some metrics here appear to have shifted.
- ATKR will likely face EBITDA margin pressure not just this year but over the next two years as well.
- Forward EV/EBITDA valuations don't reflect this, with the current multiple trading at a 60% premium to its 5-year average.
- Even the risk-reward on the standalone and relative strength charts look unfavorable.
Introduction
Atkore Inc. ( ATKR ), a mid-cap play on the growing importance of electric infrastructure in the country, (over 90% of the company's products are used to support electric infrastructure) has proven to be a solid source of alpha over the past year. During the last 12 months, we've seen the stock expand by over 50%, and in the process, also outperform both the key benchmark (by 1.79x), as well as its peers from the broad industrial landscape (by 1.21x)....
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For further details see:
Atkore: Tame The Enthusiasm