What Happened?
Shares of landscaping service company BrightView (NYSE: BV) fell 2.4% in the morning session after the company reported disappointing third-quarter earnings results, missing Wall Street's expectations for both revenue and profit and providing a weak forecast for the upcoming year.
The landscaping services company's revenue for the quarter fell 3.6% from the previous year to $702.8 million. Adjusted earnings came in at 27 cents per share, below the 32 cents analysts had forecast. BrightView attributed the weaker results in part to sluggish demand for commercial projects. Furthermore, the company's financial outlook for the 2026 fiscal year came in below what analysts were estimating for both revenue and EBITDA. Compounding the negative news, Baird lowered its price target on the shares to $15 from $19, prompting the stock to hit a new 52-week low.
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What Is The Market Telling Us
BrightView’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock dropped 11.2% on the news that the company lowered its fiscal 2025 revenue guidance, citing macroeconomic pressures. The commercial landscaping company now expects full-year revenue to be between $2.68 billion and $2.73 billion, a reduction from the previous forecast of $2.75 billion to $2.84 billion. BrightView attributed the downward revision to an uncertain economic environment, which has led to delays in development projects and reduced discretionary spending from clients. Specifically, the company adjusted its outlook for its Maintenance Land Revenue, now expecting it to be between a 2% decline and flat, a significant change from the prior estimate of 1% to 3% growth. Similarly, the forecast for Development Revenue Growth was cut from a gain of 3% to 6% to a range of a 2% decline to flat. Despite the weaker revenue outlook, BrightView reaffirmed its commitment to achieving record Adjusted EBITDA and margins for the fiscal year. The company also raised its guidance for adjusted free cash flow.
BrightView is down 27.6% since the beginning of the year, and at $11.48 per share, it is trading 35.9% below its 52-week high of $17.89 from December 2024. Investors who bought $1,000 worth of BrightView’s shares 5 years ago would now be looking at an investment worth $809.24.
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