DRX: Q4 Financials Preview
What you need to know:• ADF Group will be reporting Q4 & FY24 financial results on April 11th before market open.
• For Q4, we are expecting revenue of $77.1M (+50% YoY), gross margin of 22% (vs. 18% last year), and adjusted EBITDA of $13.6M (+132% YoY).
• We view the recent pullback in DRX stock as a major buying opportunity ahead of another record year ahead while valuation remains cheap at 4.5x FY25E EBITDA.
ADF Group (DRX:TSX, ADFJF:OTC) announced that it will be reporting Q4 & FY24 financial results for the year ending January 31st on April 11th before market open. We are expecting another excellent quarter from ADF, with 50% YoY topline growth and continued margin expansion compared to last year. A breakdown of our estimates can be found below. Given the recent 13% pullback in DRX stock, we view the current price as a major buying opportunity ahead of another record year in FY25. ADF Group remains one of our highest conviction names in our coverage. We are maintaining our BUY rating and $13.00/share target price on ADF Group.
The conference call will be held at 10AM EST on April 11th which investors can register for using this link or by dialing 1-888-390-0620.
Q4 & FY24 Financials Preview
For Q4, we are expecting:
• Revenue of $77.1M, representing 50% YoY growth
• Gross margin of 22% (compared to 18% in Q4/23)
• Adjusted EBITDA of $13.6M (18% margin vs. 11% last year, 132% YoY growth)
• Net income of $8.6M or $0.26/share (vs. $2.9M or $0.07/share last year)
For FY24, we are expecting:
• Revenue of $319.7M, representing 27% YoY growth
• Gross margin of 21% (compared to 14% in FY23)
• Adjusted EBITDA of $54.1M (17% margin vs. 10% last year, 107% YoY growth)
• Net income of $35.7M or $1.09/share (vs. $14.9M or $0.46/share last year)
ADF Group is engaged in the design and engineering of connections, fabrication and installation of complex steel superstructures, heavy steel built-ups, as well as architectural and miscellaneous metalwork for the five principal segments of the non-residential construction market namely, office towers and high-rises, commercial and recreational buildings, airport facilities, industrial complexes and nuclear facilities, and transport infrastructures.
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