What Do Beacon’s Risk Factors Tell Investors?


This article was originally published on TipRanks.com

Beacon Roofing (BECN) distributes residential and non-residential roofing supplies, as well as building-related items in the United States.

Let’s take a look at the company’s financials and understand what has changed in its key risk factors that investors should know. (See Insiders’ Hot Stocks on TipRanks)

Beacon Risk Factors

According to the new TipRanks Risk Factors tool, Beacon’s main risk category is Finance & Corporate, which accounts for 47% of the total 19 risks identified. The next two major risk factor contributors are Ability to Sell and Macro & Political, which stand at 16%, each.

Beacon recently added one risk factor under Legal & Regulatory.

According to Beacon, the Occupational Safety and Health Administration’s new regulation requiring firms with 100 or more employees to have a mandatory COVID-19 immunization program might lead to higher expenses and employee turnover. This might put the company’s finances in jeopardy.

Further, the overall sector average for the Finance & Corporate risk factor is 35.7%.

Q4 Financial Results

The firm recorded $1.88 billion in sales, up 6.9% year-over-year. Sales across Residential Roofing Products, Complementary Products, and Non-Residential Roofing products rose by 3.1%, 17%, and 7%, respectively.

The company posted earnings of $1.22 per share, which fell short of analyst expectations of $1.54 per share.

Wall Street’s Take

Following the fiscal Q4 earnings announcement, Stephens analyst Trey Grooms reiterated a Neutral rating on Beacon stock and increased its price target to $62 from $56.

According to Grooms, long-term demand is solid for both the Residential and Commercial segments, but near-term growth in the Residential segment will most likely be confined to pricing changes.

Consensus among analysts is a Hold based on three Buys, five Holds, and one Sell rating in the last three months. The average BECN price target is $61.21, reflecting a potential 12-month upside of 16.5% from current levels.

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