Suburban Propane Partners (SPH): Margin Rebound Reinforces Bullish Narrative Despite Slower Revenue Growth

Suburban Propane Partners (SPH) just released its FY 2025 fourth quarter results, reporting revenue of $211.4 million and a net loss of $35.1 million, or basic EPS of -$0.54. Looking back, the company has seen revenue range from $254.6 million to $373.3 million per quarter over the past year, with EPS swinging from a low of -$0.69 to a high of $2.11. Margins proved volatile in recent quarters, giving investors plenty to weigh as they interpret the shifting profit outlook.

See our full analysis for Suburban Propane Partners.

Next up, we’re looking at how these numbers compare to the dominant narratives around Suburban Propane Partners and where the data may reinforce or disrupt common market views.

See what the community is saying about Suburban Propane Partners

Margins Improve to 7.4%, Defying Longer Downtrend

• Profit margins for the last twelve months reached 7.4%, up from 5.6% the prior year, even as annual earnings have declined by 1.7% over five years.
• The consensus narrative highlights the tension between short-term gains and long-term risks:
  • Earnings rose 43.2% in the most recent period. However, management and analysts point to ongoing structural headwinds, such as slow revenue growth (forecasted at just 1% annually) and concerns about cost inflation.
  • Targeted acquisitions and renewable fuel initiatives are expected to benefit future margins. At the same time, reliance on core propane and high leverage continue to expose Suburban Propane Partners to policy and market risks that could affect profit stability.
• Consensus opinion focuses on margin resilience, suggesting that near-term improvement may not resolve uncertainties regarding longer-term earnings durability.

Consensus narrative suggests the latest margin strength introduces new questions about what matters most to the outlook: steady expansion or enduring risks. Read the full consensus narrative to see the debate unfold. 📊 Read the full Suburban Propane Partners Consensus Narrative.

Stock Trades Well Below DCF Fair Value

• Shares trade at $19.51, 39.3% below the DCF fair value of $32.14, with a price-to-earnings ratio of 12x compared to the US gas utilities industry benchmark of 17.6x.
• The consensus view notes this discount and low multiple:
  • Despite attractive valuation metrics, recent declines in revenue momentum and increasing quarterly profit volatility raise questions about how much upside can be realized.
  • Analysts note that stable capital returns could be at risk if interest expense coverage does not improve and if distribution payouts exceed operational performance.

Dividend Instability and Debt Remain in Focus

• Dividend payments have been unstable over the last year, and interest expenses are not well covered by earnings. The company’s consolidated leverage ratio stands at 4.33x, indicating a high level of financial risk.
• As the consensus narrative emphasizes:
  • While recent profit and margin rebounds are positive factors, persistently high leverage and variable dividends highlight the risk that cash flows may be less stable than anticipated.
  • The combination of high payout ratios, limited protection against cost increases, and slow revenue growth may constrain Suburban Propane Partners’ options for future investment or capital returns to shareholders.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Suburban Propane Partners on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Spot something others might have missed? Take a few minutes to put your own spin on the results, challenge the consensus, and Do it your way

A great starting point for your Suburban Propane Partners research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

See What Else Is Out There

Suburban Propane Partners faces unstable dividends, high financial leverage, and concerns that inconsistent cash flows may limit future growth or payouts.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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