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Aggressive Growth

Rubicon Technology, Inc. (RBCN - Snapshot Report) analysts are raising estimates as the company nears its next quarterly report. Guidance was optimistic in the latest announcement and it is starting to look like this Zacks #1 Rank (Strong Buy) is on its way to a fifth consecutive earnings surprise.

Company Description

Rubicon provides advanced electronic materials like for light-emitting diodes (LEDs), radio frequency integrated circuits and other optical applications.

Potential Surprise

Analysts are very cautious with their earnings estimates, so when we see those projections rising ahead of a quarterly announcement it is a very bullish indicator. So, with another round of upward revisions coming this week, things are looking good for the May 5 press release.

The Zacks Consensus Estimate for the quarter is up to $0.66 now, which is more than 9 times the $0.07 from a year ago. The full-year consensus is calling for EPS to grow 110%, to $2.71. Earnings are expected to fall off 23% next year, but those forecasts are rising and the long-term expected growth rate is still an impressive 38%.

Good Surprise History

Rubicon reported its fourth consecutive earnings surprise back on Feb 16. Revenues for the fourth quarter rose 44%, to $29.5 million. Combine that with expanding margins and EPS was up 83% to $0.64.

Guidance that came along with the results was encouraging. The CEO, Raja Parvez, said "I am very pleased with the extraordinary finish to 2010 and look forward to what we expect to be a very strong 2011."

Rubicon continues to ramp up its capacity and see strong demand for its 6 inch polished wafers, which accounted for over a quarter of the company's revenue for the period.

The Chart

Shares of of RBCN have been weakening lately, but that looks to be due to the skittish market. Now could be a good time buy up shares of this oversold Zacks #1 Rank (Strong Buy).

Rubicon  - ticker RBCN>


Bill Wilton is the Aggressive Growth Stock Strategist for He is also the Editor in charge of the Zacks Small Cap Trader service

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