PriceSmart, Inc. (PSMT) just hit a new all-time high at $39.93 after reporting strong Q3 results in early January that included a 14% earnings surprise. With an average earnings surprise of 17% over the last four quarters and bullish growth projection, this Zacks #1 rank stock offers a big box of momentum.
Company Description
PriceSmart, Inc owns and operates warehouse clubs primarily in Latin America and the Caribbean. The company was founded in 1994 and has a market cap of $1.2 billion.
With consumers still searching for value, PriceSmart has been well positioned to capitalize. That dynamic was on display with strong Q3 results from early January that came in ahead of expectations.
Third-Quarter Results
Revenue for the period was up 22% from last year to $377 million. Earnings also looked good at 50 cents, 14% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 17% over the last four quarters.
PriceSmart noted that its sales got a boost from 2 additional stores opened during the year, pushing its store count to 28.
Financial Position
The company has also been growing its cash position, up $11 million from last year to $50 million against total debt of $67 million.
Estimates
Even though we haven’t seen any movement in estimates off the good quarter yet, they were on the move ahead of time, with the current year up 26 cents in the last 3 months to $1.96. The next-year estimate is up 53 cents in the same time to $2.27, a solid 16% growth projection.
But in spite of the gains, the valuation picture is still reasonable, with a forward P/E of 20X against the industry average of 17X.
6-Month Chart
On the chart, shares jumped higher on the good news to trade within 2 cents of the all-time high at $39.93. Take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service.
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