Titan Machinery Inc. (TITN) has just wrapped up a great year. The company grew both organically and through M&A activity and is expecting a great fiscal 2012.
Estimates keep moving higher, keep growth rates attractive and valuations in check for this Zacks #1 Rank.
Company Description
Titan Machinery makes construction and agricultural equipment in the U.S. The company offers used and new machinery, parts and related services.
Big Beat
On Apr 18 Titan Machinery posted great quarterly results for the final period of fiscal 2011. Revenue soared 46%, to $368 million since the same period a year ago. Each segment of the company contributed to the growth rate.
Net income more than tripled, to $10.4 million. That breaks down to $0.57 per share, up from $0.19 a year ago and well ahead of the $0.36 that analysts were expecting.
Expanding and Acquiring
During 2011 Titan Machinery completed 3 acquisitions. Through those deals the company added 2 agriculture dealerships, 4 rental location as well as opening a new location of their own and expanded another.
Estimates Moving Higher
Titan’s management is optimistic about fiscal 2012 as “The economy in the Upper Midwest remains robust, due to projected increases in farm cash receipts and activity around the various oil, gas and coal formations, among other factors.”
Analyst estimates are mixed for the 2 quarters, but the long-term outlook clearly higher as the Zacks Consensus Estimates for 2012 and 2013 are moving higher.
After 8 upward estimate revisions, the 2012 average estimate is up 27 cents, to $1.61. Next year’s consensus rose 24 cents, to $1.94. If Titan hits these marks the annual growth rates would be 31% and 21%, respectively.
The Chart
Shares of TITN jumped on the earnings news and now have a forward P/E of nearly 20 times. However, the stock is still priced at a discount when you factor in the growth rate, giving it a PEG ratio of 1.0. The price to sales ratio is at 0.5 times.
Take a look at the chart below. You can see how quickly and far those estimates have jumped for TITN, a great trend.
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
TITAN MACHINERY (TITN): Free Stock Analysis Report
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