NFI Group Stock Is Up 18% After Earnings: What Investors Need to Know

NFI stock (TSX:NFI) saw shares surge after reporting strong earnings with a narrowing loss, and even more growth due this year and beyond.

| More on:
Make a choice, path to success, sign

Image source: Getty Images

NFI Group (TSX:NFI) gave investors something to celebrate last week as the company announced earnings that blew past estimates. Analysts and investors alike were impressed with the news, which showed continued momentum for the stock. So let’s get into what investors should know about NFI stock, and whether it’s time to buy.

What happened

Shares of NFI stock rose after reporting a net loss of US$9.4 million during the first quarter. This was still a major improvement, given that the company had reported a loss of US$46 million just a year before. The bus maker stated that its net loss per share came down to just US$0.08, again a major improvement compared to the loss of US$0.60 the year before.

Furthermore, the stock reported revenue from transit buses of US$449.5 million, which was up almost 66% year over year. Plus, manufacturing revenue also increased 46%, thanks to more vehicle deliveries and higher average sale prices.

Analysts weigh in

Analysts were quite pleased with the results, stating that there continues to be “exceptionally strong” visibility for bus deliveries, higher pricing, and earnings before interest, taxes, depreciation and amortization (EBITDA).

There should therefore continue to be growth through 2025 and beyond, especially on the back of higher prices. In fact, this should continue even with competitive changes occurring across North America. This competition relates to the United States market for heavy-duty transit buses, in the words of one analyst.

In this case, there are really only two options, and NFI stock is one of them. Therefore, with 5,421 new orders in the first quarter, and a backlog of 14,783 worth US$11.6 billion, it’s looking quite good for the future of NFI stock.

What to watch

If you’re hoping for momentum to continue, there are a few items that investors should consider watching. For one, ensure the company is chipping away at its backlog, while also increasing it with even more orders.

Furthermore, keep watch on supply chain conditions. These have provided a challenge in the past, but one that NFI stock seems to have passed for now. Especially as management stated that the situation continues to improve, and this has supported NFI stock’s recovery plan.

Overall, continue to watch NFI for improvements in both demand and availability. NFI stock should be set for life if the company can keep this up, given it’s part of a government regulated duopoly. But should another company edge in on its territory, or supply constraints occur, the company could see losses climb once more.

Bottom line

NFI has come a long way since the supply-chain disruptions of the past. While still operating at a loss, it has seen massive improvement. And what’s more, the company seems to have a solid future for at least the next two years. As long as it can keep up with demand, and increase it as well, NFI stock looks like a solid growth stock to consider on the TSX today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends NFI Group. The Motley Fool has a disclosure policy.

More on Stocks for Beginners

Aircraft wing plane
Stocks for Beginners

Bombardier Stock Is up 16% After Earnings: What Investors Need to Know

Bombardier’s continued focus on high-margin service revenue, expansion of manufacturing capabilities, and solid order book could help its stock continue…

Read more »

Financial technology concept.
Bank Stocks

How Much Will Royal Bank of Canada Pay in Dividends This Year?

Royal Bank offers safe dividends. However, it would be safer for investors to buy on a pullback.

Read more »

Stocks for Beginners

4 Stocks That Can Help You to Get Richer in 2024

Looking for stocks that could help you get richer in 2024 and long into the future. These four stocks have…

Read more »

Overhead shot of young adults using technology at a table
Tech Stocks

Missed Out on Nvidia Stock? Buy Celestica Stock Instead

Nvidia stock (NASDAQ:NVDA) has certainly been the heavy hitter of 2023 and 2024, but this stock has grown even more…

Read more »

Dividend Stocks

Bull Market Buys: 1 Magnificent Stock to Own for the Long Run

This one cyclical stock could be the best long-term option for investors, especially while shares still offer a steal of…

Read more »

healthcare pharma
Stocks for Beginners

These 2 Healthcare Stocks Are Set to Soar in 2024 and Beyond 

Are you looking for innovation and growth? These two healthcare stocks offer exposure to the growing tech of the healthcare…

Read more »

Business success with growing, rising charts and businessman in background
Stocks for Beginners

3 Top Growth Stocks That Could Run Circles Around the Market in 2024

These three growth stocks all have one very important thing in common, which should help drive further growth throughout 2024.

Read more »

Upwards momentum
Stocks for Beginners

Check Out This Soaring Stock up 556% in 3 Years — With More Gains Likely to Come

Despite rallying by more than 500% in the last three years, this top Canadian stock still has room to surge…

Read more »