Beacon (BECN) Banks on Technology Investments, Expansion – October 7, 2022

Beacon Roofing Supply, Inc. (BECN Free Report) has been on the mend lately. The company has won on strategic initiatives and successful execution of technology initiatives in the growing e-commerce platform.

On this note, this largest publicly traded roofing material distributor recently announced its partnership with SumoQuote, a fast way to create personalized quotes with precision, digitally. Under the agreement, SumoQuote’s technology will be integrated with Beacon’s e-commerce platform, Beacon PRO+, to provide a streamlined process for creating custom quotes. This will help contractors save time, manage their work more efficiently, and improve business.

Jonathan Bennett, Beacon’s chief commercial officer, stated, “We are pleased to continue to add digital integrations that are an element of our Ambition 2025 growth plans.”

Strategic efforts and investment in technology: a blessing

Beacon has undertaken several strategic initiatives to further its long-term ambition to grow and improve the customer experience, expand top line and margin, and increase value for customers, suppliers, employees and shareholders.

In February 2022, the company unveiled Ambition 2025 goals, which emphasize its winning culture, operational excellence, superior-market growth trajectory and accelerated shareholder value creation. Projects net sales of $9 billion at 8% CAGR, Adjusted EBITDA of $1 billion at 10% CAGR, significant cash flow generation, net leverage of 2.5x target Adjusted EBITDA by 2025 (which results in $2.8 billion of investment capacity), and the strategic deployment of capital in mergers and acquisitions, growth investments, and share buybacks to produce superior returns.

Beacon remains focused on four key strategic initiatives: organic growth, digital, OTC (full and time) and branch operating performance, which have been driving sales and helping improve operating profitability. The company is focused on improving sales and operational performance at foreign and domestic branches, and intends to improve the overall customer experience with increased business reach and scale. With this strategic move, your customers are likely to benefit from the best e-commerce platform in the industry, a new OTC delivery network, and a newly designed website. The company’s OTC strategy takes advantage of the density of its branch network and allows it to serve customers more effectively and efficiently.

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Zacks Investment Research
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Beacon shares are up 2.8% year-to-date against a 27.4% drop for the industry. Aside from the factors mentioned above, BECN has been recovering from business expansion moves and cost containment strategies.

Beacon recently opened some brand new locations in Texas, which will enable its service to both residential and non-residential customers in the Bryan-College Station and Sherman-Denison markets. These locations carry leading brands of roofing and ancillary products, including TRI-BUILT. Contractors in these markets will have immediate access to Beacon PRO+ to manage their business online. The company intends to open approximately 15 such locations this year to support Ambition 2025.

Zacks Ranking and Key Picks

Beacon currently has a Zacks rank of #3 (hold). You can see Full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some top-ranked stocks in the Zacks retail-wholesale sector are yum china holdings, inc. (YUMC free report), Sprouts Farmers Market, Inc. (OFS free report) and wendy’s company (WEN free report).

yum china sports a range of Zacks #1. Yum China has 10% long-term earnings growth.

The Zacks Consensus Estimate for Yum China’s 2023 sales and earnings per share (EPS) suggests growth of 19.9% ​​and 86.8%, respectively, from the prior year period levels.

Sprout Farmers Market carries a Zacks Rank #2 (Buy). The company has an earnings surprise in the last four quarters of 15.6%, on average.

The Zacks Consensus Estimate for Sprouts Farmers Market 2023 sales and EPS suggests growth of 5.9% and 7.9%, respectively, from prior year period levels.

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Wendy’s carries a Zacks #2 rank. The company has a four-quarter earnings surprise of 3.9%, on average.

The Zacks Consensus Estimate for Wendy’s 2022 sales and earnings per share suggests growth of 10.4% and 3.7%, respectively, from the prior year period levels.

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