Veeco Instruments (VECO) surged into its earnings release, but continues to sell off on the news. However, given estimate revisions and valuations, this looks like a great time to buy on the dip.
Company Description
Veeco makes instruments for manufactures of solar, data storage, semiconductors, HB_LED, scientific research and industrial products. Factories are located across the U.S. it has offices domestically, as well as in Europe and Asia.
Another Surprise
On Apr 26 Veeco reported first-quarter earnings of 46 cents per shares, beating expectations by a nickel. This was the third consecutive surprise.
Revenue came in at a record-setting $163 million, more than doubling year-over-year. Not only were the results good but the company provided a confident outlook.
Management reports strong momentum in the LED area, which is gaining traction among consumers. They also projected second-quarter earnings of between 78 and 90 cents. At the time the consensus was just 54 cents.
Estimates Soaring
Veeco analysts continue to submit drastically higher estimate revisions since I originally featured the company in February.
Over the past 2 months the Zacks Consensus Estimate for full-year 2010 is up from $1.99 to $3.31, with most of that move coming in the past 7 days. Compare this level to the 28 cent loss reported in 2009.
Forecasts for next year are averaging $3.51, up from $2.67 in that period of time. This is another 6 percentage points of growth.
Valuations
Shares were up sharply into the earnings release, but have sold off since, given the overall market weakness. However, I view this as a buying opportunity as the forward P/E is coming in at just 14 times.
Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service
Read the February 25th Feature Here
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