Core Molding Technologies, Inc. (CMT) focuses on diversifying and transitioning to a provider of engineered material and technical solutions, delivering high-value solutions to customers, and driving higher margins. The company is benefitting from government-funded infrastructure projects and sustainability improvements.
CMT saw steady sales growth and margin improvement in the first quarter, driven by volume and strategic pricing actions. Additionally, CMT has been focused on streamlining operations and optimizing capital usage, resulting in its 22% improvement in Return on Capital Employed (ROCE) on an annualized basis. This progress has paid off with positive stock performance over the last year, which is expected to sustain.
Below are some key financial metrics that back up that bullish case.
CMT’s Revenues, Net Income, and Gross Margin
CMT’s net income had experienced fluctuations since June 2020, when it was reported at a negative $5.90 million. The lowest net income occurred in March 2021 at $3.66 million before a sharp rise to over $10 million in the following quarter. This trend continued until September 2021, when the reported net income dropped again to $3.36 million. Since then, there has been fluctuating growth, with the most recent net income reported on March 31, 2023, at $14.19 million, representing a growth rate of 139.7% relative to the initial value in June 2020.
Overall, CMT’s revenue has steadily increased since December 2020, with a growth rate of 6.21%. The revenue ranged from $217.82 million (September 2020) to the latest value of $386.29 million (March 2023). The most significant revenue increase was between June 2021 and September 2021, when the revenue increased by $127.85 million (31.02%).
The company’s gross margin increased from 10.1% on June 30, 2020, to 14.4% on March 31, 2023. There have been several fluctuations along the way, most notably a decrease in September 2021 from 17.3% to 14.5%, but more recently, there has been steady growth until its current value of 14.4%. The growth rate over the entire timeframe is 4.3%.
CMT Share Price Rapidly Growing
CMT share prices are increasing, with a growth rate of approximately $1.85 over the 16 weeks covered by the data. The rate of increase is accelerating, with each successive increase of CMT’s share price larger than before. Here is a chart of CMT’s price over the past 180 days.
POWR Ratings Show High Sentiment and Growth for CMT
CMT has an overall A rating, translating to a Strong Buy in our POWR Ratings system. The stock has consistently earned an A grade over the past two months. It is ranked #2 out of 36 stocks in the Industrial - Manufacturing category.
The POWR Ratings also highlighted three noteworthy dimensions. The first is Sentiment which has seen consistently high ratings, ranging from 99-100 from January to May 2023. Quality has also seen fairly consistent ratings that range from 76-79. Growth scored 99 in both January and February 2023 before falling to 73 in March and then 53 in April.
How does Core Molding Technologies, Inc. (CMT) Stack Up Against its Peers?
Other stocks in the Industrial - Manufacturing sector that may be worth considering are CompX International Inc. (CIX), Timken Company (The) (TKR), and Vishay Precision Group Inc. (VPG). These stocks are also rated an A.
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CMT shares were trading at $19.86 per share on Monday afternoon, down $0.58 (-2.84%). Year-to-date, CMT has gained 52.89%, versus a 8.35% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics.
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