Perceptron, Inc. (PRCP) is finalizing what could be game changing technology. But even without that, the company is doing well.
This Zacks #1 Rank (Strong Buy) recently topped expectations, is growing rapidly and its not too late to get in.
Company Description
Perceptron makes non-contact measurement and inspection products for industrial and commercial applications.
Beat the Street
On May 11 Perceptron reported earnings per share of $0.06 for the fiscal third quarter. That was up from a 1-cent loss a year ago. The Zacks Consensus Estimate was calling a penny, so this was the company’s fourth consecutive earnings surprise.
Sales for the period came in at $14.1 million, up from $13.5 million. Additionally, bookings outpaced sales and drove the company’s back log to its highest level in more than 10 years. The back log is at $27.9 million, up $7.4 million since the same period a year ago.
Bullish Analyst
While there is only 1 analyst supplying estimates for PCRP, they are growing increasingly bullish. The full year estimate for fiscal 2011 is up 6 cents to $0.18, accounting for the surprise. But next year’s forecast is also up, rising 4 cents to $0.24.
This is quite a turnaround from the 9-cent loss in fiscal 2010.
With a market cap of just $55 million, the valuations can be a bit tricky. With P/E ratios over 50 times and a PEG above 5 times PRCP isn’t luring in value investors.
But the price to sales of 0.96 is right in line with its peers and the price to book is barely over 1.0.
A Game Changer?
Perceptron has a new technology, called Helix, which could be a game changer. They company said that it the combination of technological advances should allow the “most unique and powerful solution” in the industry.
The 3D metrology solution was announced in late 2010 and so far it looks like the beta testing is going very well. Updates are expected soon, but right now it could start contributing to revenue in fiscal 2012, which is right around the corner.
The Chart
Shares of PRCP are volatile as you seen the swings on earnings news. But the current market weakness has held share back from gaining on the most recent surprise, so this is primed for big gains once the appetite for risk starts to come back.
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
Zacks Investment Research
