Shyft Group Inc

Shyft Group Inc. (NASDAQ: SHYF) is engaged in specialty vehicle manufacturing and assembly for the commercial vehicle. The Company provides last-mile delivery, specialty service and vocation-specific upfit segments, as well as it serves recreational vehicle industries. The Company’s reportable segments include Fleet Vehicles and Services (FVS) and Specialty Vehicles (SV). 

Recent Financial and Business Updates:

• Second Quarter 2023 Highlights:
  • Sales for the second quarter of 2023 were USD 225.1 million, a 3.1% decrease from the same period in 2022, with net income of USD 4.7 million or USD 0.13 per share, compared to USD 5.3 million or USD 0.15 per share in the previous year.
  • Adjusted EBITDA increased to USD 15.9 million, representing 7.0% of sales, compared to USD 13.7 million or 5.9% of sales in the prior year. Adjusted net income rose to USD 8.7 million or USD 0.25 per share from USD 7.5 million or USD 0.21 per share in the previous year.
  • Consolidated backlog as of June 30, 2023, stood at USD 510.2 million, down 55.1% from USD 1.1 billion as of June 30, 2022.
  • Operating cash flow was USD 29.7 million, a significant increase compared to an outflow of USD 8.9 million in the previous year.

• Fleet Vehicles and Services (FVS):
  • FVS segment sales amounted to USD 139.0 million, a 1.5% increase from the previous year.
  • Adjusted EBITDA for FVS was USD 12.5 million, representing 9.0% of sales, down from USD 14.5 million or 10.6% of sales in the prior year.
  • FVS segment quarter-end backlog was USD 437.8 million, down 56.2% from USD 1.0 billion in the previous year.

• Specialty Vehicles (SV):
  • SV segment sales were USD 87.6 million, an 8.1% decrease from the previous year.
  • Adjusted EBITDA for SV was USD 17.4 million, representing 19.8% of sales, an increase from USD 12.9 million or 13.5% of sales in the prior year.
  • SV segment quarter-end backlog was USD 72.4 million, down 46.4% from USD 135.2 million as of June 30, 2022
  • The company deployed USD 8.3 million of capital in the quarter, including funding USD 6.5 million in capital expenditures, payment of regular dividends of USD 1.8 million, and having USD 233 million remaining under their existing share repurchase authorization.

• Revised Full-Year 2023 Outlook:
  • Sales for the full year 2023 are expected to be in the range of USD 850 million to USD 950 million, adjusted EBITDA between USD 40 million to USD 60 million, and net income of USD 1 million to USD 16 million.
  • Earnings per share are projected to be in the range of USD 0.03 to USD 0.46, and adjusted earnings per share between USD 0.33 to USD 0.76.
  • Blue Arc EV second half production remains on track, with approximately 50 vehicles expected to be delivered in the fourth quarter.
    

Technical Observation (on the daily chart)

The price of SHYF stock has shown a consistent downward trend since making 52-week high on February 02, 2023, correcting around 61.63%. Currently, the stock is near an important support zone of USD 11.00-USD 13.00, from where price has taken support in the past. The RSI (14 period) momentum indicator is in the oversold zone with a value of 17.29, with expectations of some consolidation or a short-term upside momentum. Moreover, the price is currently positioned below both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term resistance levels.

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As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to Shyft Group Inc. (NASDAQ: SHYF) at the current price of USD 12.95 as of July 27, 2023, 10:15 am PDT.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is July 27, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

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