Bed Bath & Beyond Inc. - Momentum

Bed Bath & Beyond Inc. (BBBY) recently spiked into a new all-time high after reporting strong Q4 results that came in ahead of expectations. With estimates on the rise and a bullish growth projection, this Zacks #1 rank stock offers a domestic twist to momentum.

Company Description

Bed Bath and Beyond, Inc., together with its subsidiaries, operates a chain of retail stores that specializes in home furnishings in the United States. The company was founded in 1971 and has a market cap of $13.75 billion.

With earnings season officially under way, we got an update on BBBY’s business on April 6 that came in well ahead of expectations.

Fourth-Quarter Results

Revenue for the period was up 12% from last year to $2.505 billion. Earnings also came in strong at $1.12, 15.5% ahead of the Zacks Consensus Estimate, where the company now has an average earnings surprise of 12% over the last four quarters.

Bed Bath and Beyond was also busy returning value to its shareholders, buying back 4.1 million shares of common stock for $199 million.

Financial Profile

Moving forward, the company will continue to benefit from its strong financial profile, with cash and short-term investments up $261 million from last year to $1.789 million and no long-term debt.

Estimates

With the company providing a bullish earnings outlook, analysts were quick to raise estimates, with the current year adding 20 cents to $3.53 while the next-year estimate gained 21 cents to $4.01, a bullish 14% growth projection.

Valuation

But in spite of the recent jump, the valuation picture still looks solid, with a forward P/E of 16X a discount to its peer average of 17X.

3-Month Chart

Shares of BBBY took a nice jump on the good quarter, hitting a new all-time high at $55.85 in the process. Look for support from the longer-term trend line on any weakness, take a look below.