Deer Consumer Products, Inc. (DEER) management is looking for excellent growth rates and analysts agree.
Shares dipped on the most recent earnings news, but giving the rising forecasts, this could be a great buying opportunity for this Zacks #1 Rank (Strong Buy).
Company Description
Deer Consumer Products makes small kitchen and home electronic appliances. The company’s items, like blenders and juicers, are sold around the world under brand names and customers including Black & Decker, Disney and Wal-Mart.
Revenue Doubles
On Nov 10 Deer announced third-quarter results that included revenues of over $55 million, which is up 108% since the same period last year. Net income jumped 125%, to $9.27 million. Deer said it was the best third quarter in the company’s history.
Earnings per share came in at 28 cents, topping the Zacks Consensus Estimate by 7 cents. This marked the fourth earnings surprise in the past 4 quarters.
Estimates Moving Higher
In the same press release, Deer bumped its revenue outlook to $172 million for the year, up $12 million. It also added $3 million to its net income forecast, bringing the target up to $29 million.
Deer is also projecting at least 30% revenue growth in 2011. Analysts also raised estimates. The Zacks Consensus Estimate for 2010 rose 11 cents, to 88 cents. Next year’s average projection gained 18 cents to $1.15.
If the company meets Wall Street’s expectations the annual growth rates will be 66% and 30%, respectively.
Thanks to the upward revisions shares are trading at just 13 times forward estimates. Factor in the growth rates and you get a PEG ratio of 0.4 times.
The Chart
Shares of DEER dipped on the earnings news, but quickly developed a nice level of support. This makes a nice entry point for the stock and an easy selling point, if it falls below that level.
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Small Cap Trader service
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