Orion Group Holdings (ORN) Company Overview & Stock Price Forecast
This article provides a brief analysis and stock rating for Orion Group Holdings (ORN) including an updated stock price target. Additional data on the company’s earnings yield, price/earnings ratio, return on invested capital and YTD performance are discussed as well.
Orion Group Fundamentals
Stock Price Target: $7.02
In the section below, we discuss the earnings yield, P/E, return on invested capital and YTD performance for Orion Group in comparison to the Construction industry and the S&P 500.
Orion Group is a Small Cap company with a Market Cap of $122.65M.
How are investors using Orion Group earnings yield to assess the company?
The earnings yield is used to show the percentage of a company’s earnings per share. Investors typically use earnings yield to determine which assets are underpriced or overpriced relative to other variables, like sector, industry or bond yields. Simply put, the earnings yield of a company can be used to assess how expensive a company is in relation to the earnings that are generated. When valuing companies, the SIS Research Group does not utilize the inverse P/E ratio to calculate the earnings yield. Instead, we use an adjusted earning yield calculation to capture variation amongst companies (i.e. debt and tax rates).
The current earnings yield for Orion Group is 26.10%%, in comparison to 3.46% for the S&P 500 and 1.48% for the 10-year treasury bond. The median earnings yield for the Construction industry is 6.34%.
What does Orion Group Price-to-Earnings Ratio (P/E) tell investors about the company?
The price-to-earnings ratio (P/E) is a relatively popular metric used by investors and analysts for valuing a company’s stock. The P/E ratio can be used to show how a stock’s valuation compares to other companies and the total market. Investors use the P/E ratio to determine what the market is willing to pay today based on a company’s past or future earnings. A high P/E ratio could mean that a stock’s price is too high relative to earnings, which could be a signal that a stock is currently overvalued. In turn, a low P/E ratio could indicate that a company’s current stock price is low relative to earnings.
Orion Group does not currently have a reported P/E ratio. The P/E for the Construction industry is 26.87 and the P/E for the S&P 500 is 28.94.
What is the current Price-to-Sales Ratio (P/S) for Orion Group?
The Price-to-Sales Ratio (P/S) looks at a company’s market cap and revenue to determine valuation. The P/S ratio is calculated by taking a company’s market cap and dividing by the total sales or revenue. The P/S ratio gives an idea of how much the market values every dollar of a company’s sales and can be effective in valuing unprofitable growth stocks or companies that are currently undergoing special situations or challenges. A lower the P/S ratio can be an indicator of good value.
Orion Group is currently trading at a P/S of 0.16. The P/S for the Construction industry is 0.77 and the P/S for the S&P 500 is 3.14.
How does Orion Group Price-to-BookRatio (P/B) compare to the Construction industry?
Price-to-book value (P/B) is the ratio of the market value of a company’s shares divided by its book value of equity (the value of it’s assets on the books). The book value is the difference between the book value of assets and liabilities. Typically, investors use the P/B ratio to assess if a stock is valued properly (a value of one means that the stock price is trading in line with the book value of the company). A company with a high P/B ratio could mean the stock price is overvalued as well as the converse.
Orion Group P/B ratio is 0.75. The P/B for the Construction industry is 2.32 and the P/B for the S&P 500 is 4.74.
How attractive is Orion Group Return on Invested Capital (ROIC) to investors?
Investors use the return on invested capital (ROIC) to assess how efficient a company is at turning capital into profits. The ROIC is the amount of money a company makes on it’s investments that is above the average cost of debt and equity.
Investors can use the ROIC to provide context for metrics like the (P/E) ratio. For instance, when used in isolation a low P/E ratio could suggest a company is oversold but the decline could be because a company is no longer generating value for shareholders. Conversely, companies that consistently generate high rates of ROIC can plausibly trade at a premium compared to other stocks, even if their P/E ratios are high.
Orion Group ROIC is currently -1.06% in comparison to 6.70% for the Construction industry and 8.60% for the S&P 500.
What is Orion Group YTD Performance in comparison to its industry and the total market?
The year-to-date (YTD) performance is the amount of profit/loss realized by a stock since the first trading day of the current calendar year.
The YTD performance for Orion Group is -20.16%. The Construction industry has a YTD performance of 49.15% in comparison to the YTD S&P 500 performance of 22.34%.
Recent Financial Results
- Operating loss of $8.7M for the third quarter of 2021 compared to operating income of $13.1M for the third quarter of 2020
- Net loss of $10.2M for the third quarter of 2021 compared to net income of $11.8M for the third quarter of 2020
- Q3 net loss included $1.1M of non-recurring items and $0.7M of tax expense associated with the movement of certain valuation allowances
- Adjusted EBITDA of -$0.5M in the third quarter of 2021, compared to adjusted EBITDA of $17M for the third quarter of 2020
- Backlog at the end of the third quarter was $572.8M on a third quarter book-to-bill of 2.28x
Stock Price Target: $7.02
Orion Group Holdings operates as a specialty construction company in the building, industrial, and infrastructure sectors in the US (including Alaska), Canada, and the Caribbean. It operates in two segments: Marine and Concrete. The company provides marine construction services, including construction, restoration, dredging, maintenance, and repair of marine transportation facilities and marine environmental structures. Its marine transportation facility projects comprise public port facilities, cruise ship port facilities and other marine-based facilities.
The company also provides specialty services, such as design, salvage, demolition, surveying and excavation. In addition, it offers light commercial, structural, and other concrete construction services. Orion Group Holdings was founded in 1994 and is headquartered in Houston, Texas. The current CEO is Mark Stauffer.
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This material is provided for informational purposes only and is not financial advice. The information contained herein should not solely be used for the formation of an investment decision, whether you are a long term or short term investor.