Q2 Earnings Outperformers: Verra Mobility (NASDAQ:VRRM) And The Rest Of The Electrical Systems Stocks

Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Verra Mobility (NASDAQ:VRRM) and its peers.

Like many equipment and component manufacturers, electrical systems companies are buoyed by secular trends such as connectivity and industrial automation. More specific pockets of strong demand include Internet of Things (IoT) connectivity and the 5G telecom upgrade cycle, which can benefit companies whose cables and conduits fit those needs. But like the broader industrials sector, these companies are also at the whim of economic cycles. Interest rates, for example, can greatly impact projects that drive demand for these products.

The 15 electrical systems stocks we track reported a slower Q2. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was 2.1% below.

Stocks--especially those trading at higher multiples--had a strong end of 2023, but this year has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and electrical systems stocks have had a rough stretch. On average, share prices are down 5% since the latest earnings results.

Verra Mobility (NASDAQ:VRRM)

Managing over 165 million tolling transactions per year, Verra Mobility (NYSE:VRRM) is a leading provider of smart mobility technology that enhances safety, efficiency, and convenience on roadways.

Verra Mobility reported revenues of $222.4 million, up 8.8% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a miss of analysts’ operating margin estimates and full-year revenue guidance missing analysts’ expectations.

"We delivered an outstanding second quarter, highlighted by strong revenue and earnings growth," said David Roberts, President and CEO, Verra Mobility.

Unsurprisingly, the stock is down 3.4% since reporting and currently trades at $26.71.

Is now the time to buy Verra Mobility? Access our full analysis of the earnings results here, it’s free.

Best Q2: Powell (NASDAQ:POWL)

Originally a metal-working shop supporting local petrochemical facilities, Powell (NYSE:POWL) has grown from a small Houston manufacturer to a global provider of electrical systems.

Powell reported revenues of $288.2 million, up 49.8% year on year, outperforming analysts’ expectations by 29.7%. The business had an incredible quarter with an impressive beat of analysts’ earnings estimates.

Powell delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 16% since reporting. It currently trades at $154.70.

Is now the time to buy Powell? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Kimball Electronics (NASDAQ:KE)

Founded in 1961, Kimball Electronics (NYSE:KE) is a global contract manufacturer specializing in electronics and manufacturing solutions for automotive, medical, and industrial markets.

Kimball Electronics reported revenues of $430.2 million, down 13.3% year on year, falling short of analysts’ expectations by 3.6%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations and a miss of analysts’ earnings estimates.

Kimball Electronics delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 16.7% since the results and currently trades at $17.03.

Read our full analysis of Kimball Electronics’s results here.

Thermon (NYSE:THR)

Creating the first packaged tracing systems, Thermon (NYSE:THR) is a leading provider of engineered industrial process heating solutions for process industries.

Thermon reported revenues of $115.1 million, up 7.7% year on year. This print was in line with analysts’ expectations. Aside from that, it was a mixed quarter as it also produced an impressive beat of analysts’ earnings estimates but full-year revenue guidance missing analysts’ expectations.

The stock is down 3.7% since reporting and currently trades at $28.09.

Read our full, actionable report on Thermon here, it’s free.

Whirlpool (NYSE:WHR)

Credited with introducing the first automatic washing machine, Whirlpool (NYSE:WHR) is a manufacturer of a variety of home appliances.

Whirlpool reported revenues of $3.99 billion, down 16.8% year on year. This result was in line with analysts’ expectations. Aside from that, it was a mixed quarter as it recorded full-year revenue guidance beating analysts’ expectations but a miss of analysts’ operating margin estimates.

Whirlpool had the slowest revenue growth among its peers. The stock is down 5.1% since reporting and currently trades at $93.60.

Read our full, actionable report on Whirlpool here, it’s free.

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