Improving Industry Backdrop Overshadowed by Weather-Driven SSS Miss

Research evidence excerpt

Improving Industry Backdrop Overshadowed by Weather-Driven SSS Miss

vely impacted by adverse weather conditions in the Adjusted EPS $2.26 $2.78 $3.70↓ $4.90

U.S. South, creating a 90bps headwind that management does not expect to recoup Consensus Estimates

over the remainder of the year. However, management indicated that the positive 2024A 2025A 2026E 2027E

SSS momentum continued into April, with trends approaching the low-end of the EPS $4.27 $5.81

company's long-term 3-5% growth target, compared with the Street's +3.4% for 2Q.

Valuation

BYD closed on its acquisition of Joe Hudson in early January, with the integration

2024A 2025A 2026E 2027E

successfully completed in 1Q. Management continues to target $140 million in Project

EV/EBITDA 13.6x 13.2x 11.3x360 and Joe Hudson synergies, of which $60 million has already been realized ($20

million in 1Q). An additional $30 million is expected in 2026, with the remaining $50 QTR. Adj. EPS Q1 Q2 Q3 Q4

million to be captured between 2027 and 2029. BYD plans to open 5 startup locations in 2024A $0.64 $0.76 $0.35 $0.50

2Q, with an additional 17 under development for the remainder of the year. 2025A $0.31 $0.71 $0.83 $0.90

In 2Q, management expects EBITDA margin to expand by 120-130bps y/y, with 4Q 2026E $0.58a $0.89 $1.06 $1.15

margins approaching 14%. Over the long-term, BYD anticipates annual SSS growth 2027E $0.97 $1.17 $1.34 $1.42

of 3-5%, driven by 3-4% growth in total repair costs and 1% growth in miles driven,

partially offset by a 2% decline in repairable claims due to the increasing adoption of EPS (Consensus)Adjusted earnings per unit outstanding (basic).

collision avoidance systems. BYD’s 2029 targets remain at $5 billion of revenue, $700 Notes: Share price in CAD. Financial statement figures in USD.