A leading manufacturer of architectural glass and associated aluminum products, TecnoglassInc. (TGLS), has seen its shares gain74.8% over the past three months to close Thursday’s trading session at $12.08. It is currently trading just 2.3% below its all-time high of $12.37, which it hit on March 30, 2021. The company has gained significantly over the past few months because of strong residential demand and recovering commercial end-market conditions.
TGLS also recently completed delisting its shares from the Colombia Stock Exchange to save on expenses, time and administrative resources associated with it and further expand its U.S. advancement strategy. It sources more than 90% of its revenues from the United States.
Furthermore, the company’s board of directors declared a quarterly cash dividend of $0.03 per share payable on April 30, 2021. So, we think this is perhaps an ideal time to bet on the stock.
Here are the factors that we think could influence TGLS’ performance in the upcoming months:
Impressive Historical Growth
TGLS has grown organically and inorganically over the past few years. Its revenue and EPS increased at CAGRs of 6% and 52.1%, respectively, over the past three years. This can be attributed primarily to the company’s alliance with Schüco USA LLP in September 2018 and strategic joint venture agreement with Compagnie de Saint-Gobain S.A. (CODYY) in January 2019. These arrangements augmented TGLS’ vertical integration strategy by allowing it to acquire an ownership interest in one of the first stages of its production supply chain. The stock’s impressive performance is also reflected in its 27.8% gains over the past three years.
TGLS’ revenue from the United States segment increased 4.8% year-over-year to $87.84 million for the fourth quarter ended December 31, 2020, while its revenue from other countries segment increased 50.5% year-over-year to $5.17 million. This was mainly driven by strong growth in residential activity. Single-family residential revenues grew roughly 51% year-over-year in the quarter. TGLS’ gross profit also increased 25.8% year-over-year to $36.91 million for the quarter, and its operating income came in at $17.54 million, up nearly 63% year-over-year. Its adjusted EPS of $0.22 represents a 37.5% increase year-over-year.
Favorable Analyst Estimates
Analysts expect TGLS’ EPS to increase 120% for the quarter ended March 31, 2021, 30% for the quarter ending June 30, 2021 and 29.1% in fiscal 2021. Its revenue is expected to grow 24.9% for the quarter ending June 30, 2021.
Also, the stock has an average broker rating of 1.3, indicating favorable analyst sentiment. All five Wall Street analysts that have rated the stock have rated it a Strong Buy or Buy.
POWR Ratings Show Promise
TGLS has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight different categories. TGLS has a B grade for Growth, consistent with analysts’ expectations that its revenue and EPS will increase. It has a B grade for Sentiment also l in keeping with favorable analyst sentiment.
The stock also has a B grade for Value and Quality. This is in sync with the stock’s forward non-GAAP price/earnings ratio of 11.82x, which is 26.3% lower than the industry average16.03x and trailing-12-month gross profit margin of 37.1%, which is higher than the industry average 28.8%. TGLS also has a B grade for Stability.
We have graded TGLS for Momentum also. Click here to see all TGLS’ ratings.
Of 54 stocks in the A-rated Industrial – Building Materials industry, TGLS is ranked #1.
Click here to access 31 other top-rated stocks in the same industry.
The company has gained significantly over the past three months because of strong growth in residential business. TGLS also posted solid financials in its fourth quarter ended December 31, 2020. Moreover, the company is ranked the #1 architectural glass transformation company in Latin America and is the second largest glass fabricator serving the United States. So, we think the time is perhaps ripe to buy the stock because it is expected to generate big returns in the near term.
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TGLS shares were trading at $12.26 per share on Monday afternoon, up $0.18 (+1.49%). Year-to-date, TGLS has gained 77.83%, versus a 9.05% rise in the benchmark S&P 500 index during the same period.
About the Author: Manisha Chatterjee
Since she was young, Manisha has had a strong interest in the stock market. She majored in Economics in college and has a passion for writing, which has led to her career as a research analyst. More...
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