Taylor Devices: Another Ugly Quarter Could Set Up A Big Rebound

Fernanda Galvez Jalil 1.27K Followers Follow Summary Taylor Devices reported another weak quarter but maintains a record $55.2M backlog, signaling strong demand. Despite a 26% YoY revenue decline and a 44% revenue miss, strong operating cash flow and working capital shifts suggest unrecognized project activity. I see the revenue shortfall as a timing issue, not a demand problem, and expect backlog conversion to drive a sharp earnings rebound. I upgrade TAYD to Strong Buy, targeting a 40% upside with a $74.70 fair value, supported by backlog strength and cash flow. bymuratdeniz/iStock via Getty Images Investment Thesis Taylor Devices ( TAYD ) just reported another ugly quarter, but revenue keeps falling while the backlog reaches new highs, and the unusual gross margin and working-capital movements suggest that the company is doing plenty of This article was written by Fernanda Galvez Jalil 1.27K Followers Follow My name is María Fernanda and I'm currently studying an MBA. My inspiration investors are Warren Buffett, Peter Lynch and Terry Smith, so I look for quality companies at a reasonable valuation. I believe that, in the long term, fundamentals are what drive the share price, so I look to predict what a business's earnings per share will do. Analyst’s Disclosure: I/we have a beneficial long position in the shares of TAYD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.