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Aggressive Growth

Stoneridge Inc. (SRI - Snapshot Report) estimates are at a 5-year high after a convincing rebound out of the recession.

Company Description

Stoneridge makes engineered electrical components for the automotive, agriculture and off-highway vehicle industries. The company is headquartered in Ohio and has a market cap of roughly $250 million.

Huge Growth Rates

The Zacks Consensus Estimate for 2010 is currently 49 cents, up considerably from the $1.25 loss in 2009. Next year's forecasts are averaging $1.30, a 165% growth rate.

Valuations are tough to get a read on when a company is coming out of a negative year, because the longer-term growth rate can't be fairly calculated. The value in SRI is not in the 20 times forward P/E, but rather the price-to-sales ratio of 0.46, which is better than the average of its peers, which is 0.98.

Beat the Street

Estimates are up due to the most recent earnings surprise, which was on Jul 28. Stoneridge reported a 63% jump in net sales since last year, to $166 million. The bulk of that increase was attributed to higher volumes rather than price increases.

Net income came in at $4.2 million, which breaks down to an EPS of 17 cents. A year ago Stoneridge lost almost $20 million, or 84 cents per share.

Bullish Outlook

Stoneridge is currently projecting annual sales between $605 million and $625 million. Using the median of the estimate, this is calling for a 29% jump in annual sales, from $475 million in 2009.

The Chart

Below is a chart with a series of different colored lines, which represent a particular year's Zacks Consensus Estimate. You can see that the full-year projections have bounce back sharply from the recession-induced lows and are actually at a 5-year high.

Stoneridge Inc. - ticker SRI >
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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

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