April 9, 2019

SITE – Market expectations are for Uniform ROA compression, and management is concerned about their residential segment, macro headwinds, and acquisitions


  • SiteOne Landscape Supply, Inc. (SITE:USA) currently trades near recent averages relative to UAFRS-based (Uniform) Earnings, with a 22.1x Uniform P/E, implying bearish expectations for the firm. Furthermore, management may be concerned about slowing residential segment growth, macro and weather-related headwinds, and their recent acquisitions
  • Specifically, management may be exaggerating their unique market position and maintenance segment tailwinds, and may be downplaying concerns about their 2018 results, slowing residential segment growth, and tariffs. Moreover, they may be concerned about their barcoding initiative progress, revenue mix, and hurricane-related nursery damage in the Southeast. Finally, they may lack confidence in their ability to sustain gross margin and cash flow growth, and may be concerned about sales seasonality, taxes, and their C&C and All Around Landscape acquisitions
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