Air Methods Corp

Air Methods Corp (AIRM - Snapshot Report) recently posted its third consecutive earnings surprise. Revenues are surging and analysts love the outlook heading into 2011.

The valuations and fundamentals are all pointing to a great future for this Zacks #1 Rank (Strong Buy).

Company Description

Air Methods provides emergency medical air transportation services and systems. The company has about 300 aircrafts that operate from bases in 42 states.

Profits Quadruple

When Air Methods posted quarterly results on Mar 10 they showed a 24% increase in revenue, to $150 million thanks to higher revenues per flight. Net income jumped from $2.7 million to $12.6 million.

Earnings broke down to $0.99 per share, which was up from $0.22 a year ago and beat the Zacks Consensus Estimate by 23 cents. Air Methods has now come in ahead of expectations 3 quarters in a row.

Estimates Take Off

Not surprisingly so, analysts quickly raised their full-year targets for 2011 and 2012. Analysts polled by Zacks are now expecting $3.76 per share this year, up 38 cents on the news.

The Zacks Consensus Estimate for next year is up 76 cents, to $4.36 per share. Last year Air Methods earned $3.50, putting expected growth rates at 8% and 16%, respectively.

New Acquisition

A few days before the earnings news, Air Methods announced the purchase of United Rotorcraft solutions. The company provides aircraft refurbishment services and custom installations.

Air Methods described the move as a "key milestone" for its global products division.

Valuations & Fundamentals

Shares of AIRM are trading at 17 times this year's estimates and with a PEG ratio near 0.9. Both solid levels.

The company's ROE has been increasing steadily in each of the past 3 quarters and is now just under 20%. Margins, book value and other metrics are all heading in the right direction.

The Chart

Seeing earnings rise each year and throughout the year is what you want when looking at a stocks. But the sharper those jumps are, the faster the shares will move. Look at the recent earnings history for AIRM?

Look below and you can see analysts are not afraid to give them huge upward revisions and that is an investor’s best friend.

Read the November 16th Feature Here

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

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Read the full analyst report on AIRM