Dollar Thrifty Automotive Group, Inc. (DTG) recently spiked to a new all-time high after pleasing the Street by raising its full-year 2011 guidance. With sales on the upswing in the rebounding economy, this Zacks #1 rank stock is a solid momentum pick.
Company Description
Dollar Thrifty Automotive Group, Inc., through its subsidiaries, rents and leases vehicles through company owned and franchised stores under Dollar and the Thrifty brand names primarily in the United States and Canada. The company was founded in 1989 and has a market cap of $1.95 billion.
Dollar Thrifty has been one of the most amazing momentum stories of the last two years, with shares jumping from 60 cents in March of 2009 to a recent high of $69.49. The gains come on the heels of the company raising its full-year guidance in late March that sent shares to an all-time high.
DTG Raises Full-Year Guidance
Dollar Thrifty raised its 2011 adjusted EBITDA (earnings before interest/taxes/amortization/deductions) to between $235 and $260 million, a sharp boost from its previous range of $175 million to $200 million after saying it expects strong demand to support sales this summer.
Financial Profile
The company has been using its solid earnings momentum to strengthen its balance sheet, with cash and equivalents up $242 million from three quarters ago to $841 million. Its total debt is down $331 million from last year to $1.38 billion.
Estimates Jump
That revision had a powerful impact on estimates, with the current year jumping $1.17 to $4.28 while the next-year estimate tacked on 93 cents to $4.42, a modest 3% growth projection.
But in spite of the recent gains, the valuation picture still looks attractive, with a forward P/E of 16X a nice discount to the industry average of 19X.
5-Year Chart
The 5-year chart is a great example of the volatility and current bull trend this stock has seen. Take a look at the recent all-time high below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.
DOLLAR THRIFTY (DTG): Free Stock Analysis Report
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