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What Falling Estimates & Price Mean for Ritchie Bros. Auctioneers (RBA)

Zacks Equity Research
Updated

Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.

One such stock that you may want to consider dropping is Ritchie Bros. Auctioneers Incorporated RBA, which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #5 (Strong Sell) further confirms weakness in RBA.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen eight estimates moving down in the past 30 days, compared with one upward revision. This trend has caused the consensus estimate to trend lower, going from 94 cents a share a month ago to its current level of 87 cents.

Also, for the current quarter, Ritchie Bros. Auctioneers has seen seven downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to 19 cents a share from 24 cents over the past 30 days.   

The stock has also seen some pretty dismal trading lately, as the share price has dropped 12.6% in the past month.

Ritchie Bros. Auctioneers Incorporated Price and Consensus

Ritchie Bros. Auctioneers Incorporated Price and Consensus | Ritchie Bros. Auctioneers Incorporated Quote

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So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don’t have a long time horizon to wait.

If you are still interested in the Auction and Valuation Services industry, you may instead consider a better-ranked stock - Copart, Inc. CPRT. The stock currently carries a Zacks Rank #2 (Buy) and may be a better selection at this time. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Ritchie Bros. Auctioneers Incorporated (RBA) : Free Stock Analysis Report
 
Copart, Inc. (CPRT) : Free Stock Analysis Report
 
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Zacks Investment Research