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Momentum

Michael Vodicka

GNC Holdings, Inc.

GNC

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GNC Holdings, Inc. (GNC - Snapshot Report) is proving that health is still in vogue, recently hitting a new all-time high after reporting a 27% earnings surprise. With estimates on the rise and a bullish growth projection, this Zacks #1 Rank stock is juiced with momentum.

Company Description

GNC Holdings, Inc. operates as a specialty retailer of health and wellness products in the United States and 48 other countries globally and has a market cap of $2.83 billion.

With earnings season sweeping across the Street, we got an update on GNC's business on October 21 with strong Q3 results that came in well ahead of expectations.

Third-Quarter Results

Revenue for the period was up 16% from last year to $538 million. Earnings also came in strong at 46 cents, 28% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 25% over the last two quarters.

The good results were driven by strong company-owned, domestic same-store sales, up 10.3% from last year for its 25th consecutive quarter of same-store sales growth.

GNC also saw strong results from franchising and manufacturing, with revenue up 23% and 18% respectively from last year.

Estimates

We saw some solid movement in estimates off the good quarter, with the current year adding 10% to $1.46 while the next-year estimate tacked on 9% to $1.70, a bullish 16% growth projection.

Valuation

But in spite of recent gains, GNC's PEG ratio of 1.12 is only a small premium to the benchmark of 1 for value.

6-Month Chart

On the chart, GNC had a great October, with shares jumping into a new all-time high on the strong market and good quarter. Take a look below.

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

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