National Beverage Corp. - Momentum

National Beverage Corp. (FIZZ) recently hit a new multi-year high after reporting its fourth earnings surprise in the last four quarters. As a proven performer in a challenging consumer environment, this Zacks #1 rank stocks looks like a solid momentum pick.

Company Description

National Beverage Corp. develops, manufactures and sells a line of beverage products in the United States. Some of the company’s more popular brands include Shasta, Faygo and LaCroix. National Beverage Corp. was founded in 1985 and has a market cap of $653 million.

National Beverage Corp. was one of the earlier quarterly reports to hit the wire, with its better than expected results lifting its share price to a new multi-year high.

First-Quarter Results

Revenue for the period was up a marginal 1.4% from last year to $165 million. Earnings came in better than expected at 26 cents, 4% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 7.5% over the last four quarters.

The strong results were driven by solid margin expansion, where gross margin gained more than 4% points from last year to 35.4% on lower input costs. Some of those gains were tempered by a 12.5% increase in SG&A expenses as the company spent more on marketing and branding support.

Balance Sheet

Although the company’s cash position fell $12 million from last year to $83 million it still has an excellent balance sheet, with no long-term debt.

Estimates

We did see some movement in estimates on the good quarter, with the current year up 2 cents to 82 cents and the next-year estimate adding 3 cents to 88 cents, a solid 7% growth projection.

Valuation

The valuation looks pretty solid too, with a forward P/E of 17X against the industry average of 16.5X.

2-Year Chart

FIZZ has been grinding higher for most of the last 18 months, recently hitting a new multi-year high after spiking on the good quarter. Look for support from the trend line on any weakness, take a look below.