Q: What do you think about the most recent results for esi and the prospects for this company going forward? What is the stock falling?
5i Research Answer:
EPS was a loss of 11c, vs estimates of +3.1c. Revenue of $426M matched estimates. EBITDA of $113.3M also matched estimates. Revenue fell 1% year over year. RBC downgraded its rating. The loss, missed estimates, its small size, downgrade and weak sector are all contributing to the stock's 29% YTD decline. Debt is also much too high for a cyclical company, though ESI says it plans to cut debt by $200M this year. It is expected to be (barely) profitable this year, with 7c EPS the forecast. The stock is down 77% in the past ten years and we do not think this is the time to own it.