Concrete Pumping (BBCP)

Concrete and waste management company Concrete Pumping (NASDAQ:BBCP) missed Wall Street’s revenue expectations in Q1 CY2025, with sales falling 12.2% year on year to $93.96 million. The company’s full-year revenue guidance of $385 million at the midpoint came in 5.8% below analysts’ estimates. Its GAAP loss of $0.01 per share was significantly below analysts’ consensus estimates.

Company Overview

Going public via SPAC in 2018, Concrete Pumping (NASDAQ:BBCP) is a provider of concrete pumping and waste management services in the United States and the United Kingdom.

Construction and maintenance services companies not only boast technical know-how in specialized areas but also may hold special licenses and permits. Those who work in more regulated areas can enjoy more predictable revenue streams - for example, fire escapes need to be inspected every five years. More recently, services to address energy efficiency and labor availability are also creating incremental demand. But like the broader industrials sector, construction and maintenance services companies are at the whim of economic cycles as external factors like interest rates can greatly impact the new construction that drives incremental demand for these companies’ offerings.

Concrete Pumping’s competitors include United Rentals (NYSE:URI), Cemex (NYSE:CX), and Vulcan Materials (NYSE:VMC).

A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, Concrete Pumping’s 5.3% annualized revenue growth over the last five years was tepid. This fell short of our benchmark for the industrials sector and is a rough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Concrete Pumping’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 2.3% annually.

This quarter, Concrete Pumping missed Wall Street’s estimates and reported a rather uninspiring 12.2% year-on-year revenue decline, generating $93.96 million of revenue.

Looking ahead, sell-side analysts expect revenue to grow 5.2% over the next 12 months. While this projection indicates its newer products and services will spur better top-line performance, it is still below the sector average.

Concrete Pumping’s unit economics are great compared to the broader industrials sector and signal that it enjoys product differentiation through quality or brand. As you can see below, it averaged an excellent 40.9% gross margin over the last five years. That means Concrete Pumping only paid its suppliers $59.09 for every $100 in revenue.

Concrete Pumping’s gross profit margin came in at 38.5% this quarter, in line with the same quarter last year. On a wider time horizon, the company’s full-year margin has remained steady over the past four quarters, suggesting its input costs (such as raw materials and manufacturing expenses) have been stable and it isn’t under pressure to lower prices.

Concrete Pumping has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 11.8%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Looking at the trend in its profitability, Concrete Pumping’s operating margin rose by 2.2 percentage points over the last five years, as its sales growth gave it operating leverage.

In Q1, Concrete Pumping generated an operating margin profit margin of 8.8%, down 2.5 percentage points year on year. Since Concrete Pumping’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Concrete Pumping’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

Sadly for Concrete Pumping, its EPS declined by more than its revenue over the last two years, dropping 37.3%. This tells us the company struggled to adjust to shrinking demand.

Diving into the nuances of Concrete Pumping’s earnings can give us a better understanding of its performance. Concrete Pumping’s operating margin has declined by 3.5 percentage points over the last two years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; taxes and interest expenses can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q1, Concrete Pumping reported EPS at negative $0.01, down from $0.05 in the same quarter last year. This print missed analysts’ estimates, but we care more about long-term EPS growth than short-term movements. Over the next 12 months, Wall Street expects Concrete Pumping to perform poorly. Analysts forecast its full-year EPS of $0.22 will hit $0.40.

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

Concrete Pumping has shown decent cash profitability, giving it some flexibility to reinvest or return capital to investors. The company’s free cash flow margin averaged 6.1% over the last five years, slightly better than the broader industrials sector.

Taking a step back, we can see that Concrete Pumping’s margin dropped by 3.9 percentage points during that time. It may have ticked higher more recently, but shareholders are likely hoping for its margin to at least revert to its historical level. If the longer-term trend returns, it could signal increasing investment needs and capital intensity.

Concrete Pumping’s free cash flow clocked in at $11.09 million in Q1, equivalent to a 11.8% margin. Its cash flow turned positive after being negative in the same quarter last year, but we wouldn’t put too much weight on the short term because investment needs can be seasonal, causing temporary swings. Long-term trends trump fluctuations.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

Concrete Pumping historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 7.2%, somewhat low compared to the best industrials companies that consistently pump out 20%+.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. On average, Concrete Pumping’s ROIC increased by 2.7 percentage points annually over the last few years. This is a good sign, and we hope the company can continue improving.

Concrete Pumping reported $37.79 million of cash and $437.8 million of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $104.8 million of EBITDA over the last 12 months, we view Concrete Pumping’s 3.8× net-debt-to-EBITDA ratio as safe. We also see its $9.74 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

We struggled to find many positives in these results. Its full-year revenue guidance missed and its full-year EBITDA guidance fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 14% to $6.08 immediately after reporting.

Updated: July 9, 2025 at 11:11 PM EDT

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in Concrete Pumping.

We see the value of companies helping their customers, but in the case of Concrete Pumping, we’re out. To begin with, its revenue growth was uninspiring over the last five years, and analysts expect its demand to deteriorate over the next 12 months. And while its astounding EPS growth over the last five years shows its profits are trickling down to shareholders, the downside is its organic revenue declined. On top of that, its cash profitability fell over the last five years.

Concrete Pumping’s P/E ratio based on the next 12 months is 16.3x. While this valuation is reasonable, we don’t see a big opportunity at the moment. There are more exciting stocks to buy at the moment.

Wall Street analysts have a consensus one-year price target of $6.75 on the company (compared to the current share price of $6.71).