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  5. FTT: What are your thoughts regarding their earnings report last night and would you prefer FTT or Toromont ? [Finning International Inc.]
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Q: What are your thoughts regarding their earnings report last night and would you prefer FTT or Toromont ? Thanks
Asked by Michael on May 11, 2023
5i Research Answer:

TIH is trading at 19x Forward P/E; revenue is expected to grow 8% in 2023, and then normalize to 3%-5% after that. In Q1-2023, TIH’s revenue grew 23% to $1.06B, beating estimates of $950M and EPS was $1.16, beating estimates of $0.85. This was quite a strong quarter.

Meanwhile, FTT is trading at 9.8x Forward P/E, revenue is expected to grow 10% in 2023, and then normalize to 1%-3% going forward. In the recent quarter, FTT also beat both top and bottom line estimates; FTT’s revenue increased by 22% to 2.14B, beating estimates of $1.95B and EPS is $0.89 beating estimates of $0.70.
Overall, the recent operating results for the two companies are decent. However, given the track record of operations such as growth, ROEs, EBIT margin, etc., we would side with TIH due to its superior record.