Bear of the Day: Arcosa (ACA)

The Zacks Building Products-Miscellaneous Industry is currently in the bottom 19% of 246 Zacks industries, and Arcosa ACA may be a stock to avoid in particular. Having a Zacks Rank #5 (Strong Sell), Arcosa lands the Bear of the Day.  Compounding tougher market conditions, the manufacturer of infrastructure-related products and services is facing operational issues. Notably, the Indiana Department of Environmental Management (IDEM) has warned its aggregates division (Arcosa Lightweight) of potential emissions violations.  Arcosa’s Subpar Q4 Results Reporting fourth-quarter results in early February, Arcosa’s Q4 sales rose 14% to $666.2 million but missed estimates of $694.2 million by 4%. More concerning, Arcosa reported a net income loss of $7.7 million compared to a profit of $27.1 million in Q4 2023. Adjusted Q4 EPS was at $0.46, although this dropped from $0.68 a year ago and missed expectations of $0.79 by 42%.Image Source: Zacks Investment Research Declining EPS Revisions & P/E Valuation Taking away from Arcosa’s appealing growth trajectory is that fiscal 2025 EPS estimates have dropped 13% over the last 30 days from $4.81 to $4.56. Unfortunately, a trend of declining earnings estimate revisions could continue following the company’s eye-catching earnings miss.  Image Source: Zacks Investment ResearchFurthermore, while Arcosa’s stock trades at a reasonable 20.1X forward earnings multiple, it's noteworthy that this is above the industry average of 16.8X with some of its notable peers in the space being CRH plc CRH and TopBuild BLD.Image Source: Zacks Investment Research Bottom Line As of now, it's unclear if Arcosa can fulfill its lofty earnings expectations with double-digit EPS growth expected in FY25. Unless of course, earnings estimate revisions keep declining, which would signal more downside risk for ACA shares.  Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Arcosa, Inc. (ACA): Free Stock Analysis Report TopBuild Corp. (BLD): Free Stock Analysis Report CRH PLC (CRH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks