DG FastChannel

DG FastChannel (DGIT - Snapshot Report) recently reported excellent quarterly results. Estimates are climbing and the recent volatility has created a great value as well.

Company Description

DG FastChannel offers tech solutions for advertisers. The company offers electronic ads, syndicated programs and video for broadcasters, websites and other outlets.

Net Income Surges

On Aug 4 DG FastChannel announced second-quarter results that showed 38% top-line growth to just over $60 million. Net income more than tripled, coming in at $12.8 million. Earnings per share came in at 45 cents, almost doubling the Zacks Consensus Estimate of 23 cents.

In addition to its third consecutive earnings surprise, the company also retired all of its outstanding debt, leaving the balance sheet in excellent condition moving forward.

Thumbs Up from Analysts

Following the news all 6 covering analysts raised their full-year estimate for 2010 and 2011. DG FastChannel is now expected to earn $1.64 this year, up 13 cents for a growth rate of 18%.

Next year's consensus rose 30 cents to $2.13, an expected growth rate of 30%.

Valuations

Shares of DGIT are trading with a fairly high P/E, 21 times forward estimates. But, when the growth rates are considered (PEG of 0.7) shares are a solid value.

The Chart

DG FastChannel sold off sharply after opening higher on the earnings news. However, as the stock approaches this level off support, and given the valuations, this could be a great entry point if you can stomach the volatility.

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 full analyst report on DGIT