Odyssey Healthcare Inc.

Odyssey HealthCare, Inc. (ODSY) is surging following its third consecutive earnings surprise, this time topping forecasts by 40%.

Company Description

Odyssey Healthcare, Inc. provides hospice care services focused on palliative care for patients with life-limiting illnesses. Care is directed at managing pain and other discomforting symptoms and addressing the psychosocial and spiritual needs of patients and their families.

Crushed Estimates

Odyssey reported third-quarter results on Oct 28 that took analysts by surprise. The company reported earnings per share of 35 cents, well above the 25 cents Wall Street expected. This was the hospice provider's third consecutive earnings surprise.

Net income, of $11.6 million, was nearly double the previous year's $5.9 million. Odyssey's CEO, Robert Lefton, credited higher patient volume and controlling expenses for the successful quarter.

Explosive Growth

In the past month there 13 upward revisions were submitted for full-year 2009, this is from just 7 analysts. The Zacks Consensus Estimate for the year is now $1.16, up from $1.03. This would be good enough for a 97% year-over-year growth.

Next year's estimates are also rising. The average forecast for 2010 is currently $1.21, up 14 cents in the same period of time. This would be good for another 4% growth.

Valuations

The stock is trading at a nice value, just 12 times forward earnings. Given the growth rate, the PEG ratio is just 0.9.

The Chart

Shares of ODSY jumped violently on the earnings release, but are now consolidating and showing much less volatility. Take a look at the chart below.

Read the full analyst report on ODSY