637789

Spotting Winners: Verra Mobility (NASDAQ:VRRM) And Electrical Systems Stocks In Q1


Jabin Bastian /
2024/07/10 5:00 am EDT

Earnings results often indicate what direction a company will take in the months ahead. With Q1 now behind us, let’s have a look at Verra Mobility (NASDAQ:VRRM) and its peers.

Like many equipment and component manufacturers, electrical systems companies are buoyed by secular trends such as connectivity and industrial automation. More specific pockets of strong demand include Internet of Things (IoT) connectivity and the 5G telecom upgrade cycle, which can benefit companies whose cables and conduits fit those needs. But like the broader industrials sector, these companies are also at the whim of economic cycles. Interest rates, for example, can greatly impact projects that drive demand for these products.

The 12 electrical systems stocks we track reported a slower Q1; on average, revenues were in line with analyst consensus estimates. while next quarter's revenue guidanc below consensus. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and while some of the electrical systems stocks have fared somewhat better than others, they collectively declined, with share prices falling 3.1% on average since the previous earnings results.

Verra Mobility (NASDAQ:VRRM)

Managing over 165 million tolling transactions per year, Verra Mobility (NYSE: VRRM) is a leading provider of smart mobility technology that enhances safety, efficiency, and convenience on roadways.

Verra Mobility reported revenues of $209.7 million, up 9.3% year on year, exceeding analysts' expectations by 3.3%. Overall, it was a very strong quarter for the company with a decent beat of analysts' earnings estimates.

"Our first quarter results provided a very strong start to 2024," said David Roberts, President and CEO, Verra Mobility.

Verra Mobility Total Revenue

The stock is up 16.1% since reporting and currently trades at $27.97.

Read why we think that Verra Mobility is one of the best electrical systems stocks, our full report is free.

Best Q1: Encore Wire (NASDAQ:WIRE)

Started in a small warehouse in Texas in 1989, Encore Wire (NASDAQ:WIRE) manufactures a range of electrical building wire and cables.

Encore Wire reported revenues of $632.7 million, down 4.2% year on year, outperforming analysts' expectations by 7.3%. It was an impressive quarter for the company with a decent beat of analysts' earnings estimates.

Encore Wire Total Revenue

Encore Wire delivered the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 2.2% since reporting. It currently trades at $289.95.

Is now the time to buy Encore Wire? Access our full analysis of the earnings results here, it's free.

Weakest Q1: Identiv (NASDAQ:INVE)

Emerging from bankruptcy and rebranding in 2013, Identiv (NASDAQCM:INVE) provides digital identity and security solutions for various industries.

Identiv reported revenues of $22.49 million, down 13.5% year on year, falling short of analysts' expectations by 2.2%. It was a weak quarter for the company with a miss of analysts' earnings estimates.

As expected, the stock is down 20.2% since the results and currently trades at $4.03.

Read our full analysis of Identiv's results here.

Whirlpool (NYSE:WHR)

Credited with introducing the first automatic washing machine, Whirlpool (NYSE:WHR) is a manufacturer of a variety of home appliances.

Whirlpool reported revenues of $4.49 billion, down 3.4% year on year, surpassing analysts' expectations by 1.7%. Looking more broadly, it was a very strong quarter for the company with an impressive beat of analysts' volume estimates and a decent beat of analysts' earnings estimates.

Whirlpool pulled off the highest full-year guidance raise among its peers. The stock is down 3.9% since reporting and currently trades at $101.5.

Read our full, actionable report on Whirlpool here, it's free.

Napco (NASDAQ:NSSC)

The first company to introduce digital alarm communication over telephone lines, Napco (NASDAQGS:NSSC) offers intrusion and fire alarm systems, access control systems, and video surveillance solutions.

Napco reported revenues of $49.27 million, up 13.2% year on year, surpassing analysts' expectations by 1.3%. Looking more broadly, it was a strong quarter for the company with a decent beat of analysts' earnings estimates.

The stock is up 27.7% since reporting and currently trades at $54.31.

Read our full, actionable report on Napco here, it's free.

Join Paid Stock Investor Research

Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.