As part of a new series here at The Acquirer’s Multiple, we’re providing a new feature called ‘Stock in Focus‘ where we focus on one of the stocks from our Stock Screeners.
One of the cheapest stocks in our Stock Screeners is Matrix Service Co (NASDAQ: MTRX).
Matrix Service Co is an engineering and construction provider for large industrial projects, primarily in the oil and gas, power, petrochemical, industrial, mining, and minerals markets. It offers engineering, fabrication, construction, and maintenance services, operating across four segments. Its Electrical infrastructure segment constructs and maintains a variety of power generation facilities. Its Oil, gas, and chemical segment offers construction and maintenance for oil and gas refining and petrochemical facilities. The entity provides construction services for petroleum storage tanks in its Storage solutions segment, and it also has an Industrial segment. It derives key revenue from the Storage solutions segment. The company has operations in the US, Canada, and other countries.
A quick look at Matrix’s share price history (below) over the past twelve months shows that the price is down 65%, but here’s why the company is undervalued.
Market Cap: $237 Million
Enterprise Value: $175 Million
Operating Earnings: $46 Million
Acquirer’s Multiple: 3.82
Free Cash Flow (TTM)
Free Cash Flow: $39 Million
FCF/EV Yield: 22%
Piotroski F-Score: 7
Altman Z-Score: 3.79
Beneish M-Score: -2.94
*We make adjustments to operating earnings by constructing an operating earnings figure from the top of the income statement down, where EBIT and EBITDA are constructed from the bottom up. Calculating operating earnings from the top down standardizes the metric, making a comparison across companies, industries and sectors possible, and, by excluding special items–income that a company does not expect to recur in future years–ensures that these earnings are related only to operations.
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