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Dye & Durham’s (TSE:DND) Preliminary Q4-2022 Results Suggest Rapid Growth — Here’s Why

Story Highlights

Dye & Durham’s preliminary Q4-2022 and full-year results suggest rapid growth in profitability and revenue. Nonetheless, the stock seems to be caught up in the overall market sell-off.

Before market open today, Dye & Durham (TSE: DND) announced its preliminary results for Fiscal Q4 2022 and for the full year. For Q4, the company anticipates revenue to come in at C$129 million, representing a growth rate of 53%. Adjusted EBITDA is also expected to grow at the exact same rate, as it is forecast to be C$75 million compared to about C$49 million in the same period last year.

For the full year, the revenue growth rate is even more impressive, as DND expects a 127% increase, bringing the total revenue figure to C$475 million. Adjusted EBITDA is forecast to grow slightly more than revenue (129% year-over-year growth), bringing the adjusted EBITDA figure to C$267 million.

These results look good, as profitability growth is staying in line with revenue growth, meaning that the company is maintaining its already-high margins.

This news comes just days after the announcement that Australia’s Foreign Investment Review Board does not oppose DND’s intention of acquiring Link Administration Holdings (AU: LNK), increasing the odds of the large acquisition going through.

Nonetheless, the stock is down about 2.5% today, which could be largely attributable to the overall market being down today, as the S&P 500 (SPX) is down 1.5%, and the Canadian market is down as well.

Is Dye & Durham Stock a Buy, According to Analysts?

Turning to Wall Street, DND has a Moderate Buy consensus rating based on two Buy ratings. The average Dye & Durham price target of C$55.00 implies 333.75% upside potential. One of the Buy ratings comes from five-star-rated analyst Robert Young, who is ranked #247 out of 7,983 analysts on TipRanks. Young has an average return per rating of 16.8% (measured on a one-year basis).

Conclusion: Solid Preliminary Results Didn’t Boost the Stock

Dye & Durham posted solid preliminary results today that suggest strong revenue and profitability growth, but that wasn’t enough to boost the stock. Still, analysts are also bullish on the stock, and it will be interesting to see if more Buy ratings come in after the company releases its Q4-2022 results after market close on September 26.

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