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  5. BYD: Hello 5i Please let us know what the market is objecting to on BYDs report. [Boyd Group Services Inc.]
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Q: Hello 5i
Please let us know what the market is objecting to on BYDs report.
Many thanks,

Asked by Kat on November 10, 2021
5i Research Answer:

Same-store sales increased 10.7%, but increases were stronger in the US. The company beat sales estimates slightly by just over 1% but missed EPS estimates by 84% reporting 11 cents. EBITDA came in at $51.1M missing estimates by 19%. The company seems to be recovering well from reduced COVID restrictions, however, demand is still below pre-pandemic levels and margins are continuing to see pressure due to the labor and materials shortages, which have also made it more challenging for the company to process all jobs. This was an issue in the last quarter and management has commented that challenges are expected to remain in the fourth quarter as well. EBITDA margins were also significantly lower (10.5%) than the historical average. Overall, it was not the company's best quarter but we are willing to give BYD the benefit of the doubt here given its track record and the way management sets expectations. Management has plans to double the number of trainees. Given the results, we think the reaction is not totally unwarranted, but we have confidence in management to manage short-term headwinds.