Dycom Plans $150M Share Buyback After 4Q Sales Beat; Stock Jumps 12.4%

Shares of Dycom Industries jumped 12.4% on Wednesday after the specialty contracting services provider reported 4Q revenues that topped analysts’ expectations. Additionally, it announced a share buyback plan of $150 million.

Dycom (DY) reported an adjusted loss of $0.07 per share, compared to the year-ago loss of $0.23 per share. However, analysts were expecting earnings of $0.04 per share. Contract revenues of $750.7 million topped the Street’s estimates of $724.45 million but declined 6.2% on an organic basis. Adjusted EBITDA of $45.7 million grew marginally from the year-ago period.

During the quarter, the company repurchased 1,324,381 shares for $100 million. Dycom’s board announced a new share buyback program of $150 million. The company said, “Repurchases under the new program are authorized to be made over the next eighteen (18) months in open market purchases or privately-negotiated transactions, including pursuant to a Rule 10b5-1 plan.”

For 1Q (ending on May 1), the company expects contract revenues to be in-line to modestly lower compared with 4Q. Analysts are expecting 1Q revenues of $786.1 million, around 4.7% higher than 4Q. (See Dycom stock analysis on TipRanks)

On Jan. 7, B. Riley Financial analyst Alex Rygiel raised the stock’s price target to $97 (11% upside potential) from $92 and maintained a Buy rating based on higher valuation multiples and an improving infrastructure outlook.

Overall, consensus among analysts is a Moderate Buy based on 2 Buys. The average analyst price target of $100.50 implies upside potential of over 15% to current levels. Shares have skyrocketed around 210% over the past year.

DY analyst rating consensus

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