Whole Foods Market

Whole Foods Market, Inc. (WFM - Analyst Report) has held up well in the tough market, trading directly below its recent all-time high on another earnings surprise. With estimates on the rise and a bullish growth projection, this Zacks #2 Rank stock (Strong Buy) offers a healthy upgrade into momentum.

Company Description

Whole Foods, Inc. operates organic and health food stores in the United States, Canda and the United Kingdom. The company was founded in 1978 and has a marker cap of $11.7 billion.

Whole Foods has performed well in the weak market, trading within 10% of its recent all-time high after reporting strong Q3 results in late July that came in ahead of expectations.

Third-Quarter Results

Revenue for the period was up 11% from last year to $2.4 billion. Earnings also came in strong at 50 cents, 4% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 12% over the last four quarters.

The company noted that same-store sales growth came in at an exceptional 8.4%, enabling it to acquire gain market share at a faster pace than most of its competition.

Financial Profile

Whole Foods has used its earnings momentum to sharpen its financial profile, with cash and short-term investments up $106 million from last year while total debt fell $496 million to just $18 million.

Estimates

We saw some marginal movement in estimates off the good quarter, with the current year adding 3 cents to $1.92 while the next-year estimate gained 9 cents to $2.25, a bullish 17% growth projection.

Valuation

With a PEG ratio of 1.7, WFM trades at a premium to the benchmark of 1 for value.

12-Month Chart

On the chart, shares have held up well in the tough market, trading just beneath the recent all-time high. Take a look below.

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Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service.

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