Ultratech, Inc. (UTEK - Snapshot Report) analysts are raising expectations after the recent earnings surprise. A healthy balance sheet and optimistic outlook should be enough to propel this Zacks #1 Rank (Strong Buy) even higher.
Ultratech makes photolithography and laser processing equipment for semiconductor makers.
Top Line Jumps 64%
In Ultratech's Jan. 27 fourth-quarter 2010 earnings release, the company showed net sales of $43.6 million which is 64% higher than a year ago. Net income came in at $6.3 million, more than 4 times the $1.4 million earned in the final period of 2009.
Earnings per share was $0.25, a penny better than the Zacks Consensus Estimate. It was the fifth surprise in the past 6 quarters, after meeting expectations in the previous period.
Estimates on the Rise
Following the quarterly report analysts polled by Zacks began raising their estimates. The consensus is now up 8 cents to $1.27 for the current year.
Next year's forecasts are up 6 cents on average, to $1.61. If Ultratech can hit these targets, the annual growth rates will be 90% and 27%, respectively.
Healthy Balance Sheet
Ultratech ended 2010 with $184 million in cash and short-term investments providing it with plenty of flexibility moving forward. The company's current ratio is just under 6 times and it has virtually no long-term debt.
Shares of UTEK had a rush of volatility after the earnings news but are back on the right track. After taking a breather in recent weeks, the stock should be ready for its next leg higher soon.
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Small Cap Trader service