International Game Technology (IGT) is in a highly discretionary business, but after getting throttled by the market lately, there is some good value here.
Growth rates are in the double digits and investors looking to bargain hunt seem to be turning to IGT.
Company Description
International Game Technology makes gaming machines as well as online and mobile gaming products.
Another Earnings Surprise
On Jul 26 IGT reported a 3% increase in revenues for the third-quarter, to $489 million. Margins in both the gaming and operations segment increased, leading to better than expected earnings.
Net income came in at $78 million, or $0.26 per share. The Zacks Consensus Estimate was forecasting $0.22, giving the company 3 consecutive earnings surprises.
Estimates Increase
Analysts are trying to keep up with the better-than-expected earnings growth. Projections for this fiscal year are up a nickel, to $0.94. Next year’s estimates rose 6 cents, to $1.10.
Last year IGT brought in $0.85 per share, so the expected growth rates are at 10% and 17%, respectively.
Double Down?
After taking on the brunt of the market’s sell off, shares of the slot-machine maker are priced to move. You could scoop up IGT for about 14 times the 2012 EPS estimate, which puts the PEG ratio just under 1.0.
The Chart
With the weight of the market off of its shoulders the stock is starting to make a comeback. The MACD is showing a shift in momentum that could help IGT take out the recent high. If that happens there is plenty of upside for this Zacks #1 Rank (Strong Buy).
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service
INTL GAME TECH (IGT): Free Stock Analysis Report
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