NV5 Global (NVEE-Q)

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.

The quarter was a big miss; EPS $1.21 down from $1.61 the prior year and estimates of $1.54. 
Revenue $189.8M was higher than the prior year $188.6M but missed estimates of $203.4M. 
For 2023, guidance was $5.28 to $5.64 per share (est $5.44), Revenue guidance $878M to $915M (est $881M). 
The guidance range vs the stock drop seems out of line here to us. 
Management commentary was not that negative going forward.
The 4Q miss scared investors, but with the stock already down we would not panic here. 
We think it will be OK, but would not add. 
The stock may flatline a bit.  
Unlock Premium - Try 5i Free

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.

NVEE has grown its sales and earnings on a five-year CAGR basis by 21.1% and 29.5%, respectively. 
Its share price has grown by 23.2% on a five-year CAGR basis. 
It has a 20.7X P/E, 12.8X EV/EBITDA, and a 2.8X P/B, which are all around its five-year historical averages of 19.6X, 12.4X, and 2.9X, respectively. 
We would consider NVEE to be at a reasonable price today. 
Although, it might continue to pullback further. 
We like its management team, its disciplined approach to acquisitions, and its growth potential and execution. 
We would be OK with buying here today for a long-term position.  
Unlock Premium - Try 5i Free

(A Top Pick Jan 17/19, Down 7%) He blames the CFO for the loss. They were signing contracts that were not compliant and their guidance was off. Even though the stock is down, if they have earnings of 3.20 per share range, the stock is fully valued. If they make 4.20 next year, the stock becomes cheap and you might see it trading at 14x earnings. Infrastructure needs are large in the US so he expects it to perform.

Small cap, so volatile. Beta is 1.53. Had an SEC issue, so the CFO got the boot. Beat the street by a ton last quarter. Engineering and architecture. Lawsuits. Trading at 20x earnings. Owns it for kids and grandkids, who have a long horizon.

A small US company in his portfolio. Does growth by acquisition, so no overseas risk. Stock's a bit volatile, because of a recent accounting scare.

Technical consulting and engineering services. Stock fell, and expectation is that earnings will get back to where it justifies the $100 price. In portfolios for kids and grandkids, just sit back and let it grow for decades. No dividend. (Analysts’ price target is $100.00)