Timberland, Co. - Momentum

Timberland, Co. (TBL) recently jumped more than 30% in one day after reporting an awesome Q4 earnings surprise of 66%. With shares trading at a multi-year high and estimates on the upswing, this Zacks #1 rank stock is a great fit for momentum.

Company Description

The Timberland Company designs and sells footwear for men, woman and children worldwide and has a market cap of $1.95 billion.

Strong brands and companies have emerged from the recession with renewed vigor, with growing consumer confidence providing the back drop for strong results. That dynamic lifted Timberland to strong Q4 results on February 17 that came in well ahead of expectations.

Fourth-Quarter Results

Revenue for the period was up 27% from last year to $491 million. Earnings looked even better, coming in at 83 cents, 66% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 53% over the last four quarters.

The company largest region, North America, saw sales increase 17% to $252 million. Asia, however, saw the biggest increase, with sales up 59% from last year to $70 million.

Footwear revenue globally was up 31% to $327 million. Overall, the revenue gains showcase Timberland’s strong domestic presence and growing international profile.

Financial Profile

The company also happens to be in strong financial condition, with cash and equivalents of $272 million and no long-term debt.

Estimates

We saw some pretty solid movement in estimates off the good quarter, with the current year jumping 38 cents to $2,14 and the next-year estimate climbing 41 cents to $2.49, a solid 16% growth projection.

Valuation

But in spite of the gains, the valuation picture still looks solid, with a PEG ratio (PE/Growth) of 1.13, only marginally higher than the traditional benchmark of 1 for value.

12-Month Chart

on the chart, shares jumped 30% in one day on the strong earnings surprise to hit a new multi-year high of $39.32. Look for support from the long-term trend on any weakness. Take a look below.