Miller Industries: Shares Can Keep Moving Higher

Core Viewpoint - Miller Industries has shown strong performance in revenue, profitability, and cash flow metrics, leading to a bullish outlook despite significant stock price increases since initial buy ratings [1][8]. Financial Performance - In Q2 2024, Miller Industries reported revenue of $371.5 million, a 23.7% increase from $300.3 million in Q2 2023, driven by supply chain improvements and strong customer demand [2]. - Net income rose from $14.9 million in Q2 2023 to $20.5 million in Q2 2024, with EBITDA increasing from $23.7 million to $31.8 million [3]. - For the first half of 2024, total revenue reached $721.3 million, reflecting a year-over-year increase of 23.8%, with net income growing from $24.1 million to $37.5 million [3]. Cash Flow and Profitability Metrics - Operating cash flow decreased from $2.9 million to negative $1.7 million, but adjusted operating cash flow increased from $30.9 million to $46.2 million [3]. - Selling, general, and administrative costs as a percentage of sales improved from 6.5% to 6.1% due to compensation increases being lower than revenue growth [3]. Future Projections - Annualized projections for 2024 suggest net income could reach $90.7 million, adjusted operating cash flow $105.4 million, and EBITDA $135.8 million, all showing significant improvement over 2023 figures [4]. Valuation Comparison - On a forward basis, Miller Industries is valued attractively, with a price-to-earnings ratio of 7.3 and a price-to-operating cash flow ratio of 6.3 for 2024, making it cheaper than most comparable firms [5][6]. - Even using 2023 figures, Miller Industries remains an attractive investment opportunity, particularly with trading multiples at or below 10 [5][8].