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DealerTrack Holdings, Inc.

by Michael Vodicka

December 19, 2011 | Comments : 0 Recommended this article: (0)

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DealerTrack Holdings, Inc. (TRAK - Snapshot Report) has been surging for the last two months, recently hitting a new multi-year high after reporting another strong quarter. With estimates on the rise and a bullish growth projection, this Zacks #1 Rank stock is on the right track for momentum.

Company Description

DealerTrack Holdings, Inc., through its subsidiaries, provides software solutions to the automotive retail industry in the United States and Canada. The company was founded in 2001 and has a market cap of $1.12 billion.

DealerTrack saw big gains in October with the bullish market. But shares got an extra boost on Nov 7 after the company reported strong Q3 results that came in well ahead of expectations.

Third-Quarter Results

Revenue for the period was up 52% from last year to $96 million. Earnings also came in strong at 28 cents, 56% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 99% over the last three quarters.

Financial Profile

The company will continue to benefit from its strong financial profile, with cash and short-term investments of $65 million against no long-term debt.

Estimates

We saw some bullish movement in estimates off the good quarter, with the current year adding 11 cents to 80 cents while the next-year estimate gained 14 cents to 91 cents, a healthy 14% growth projection.

Valuation

With a PEG ratio of 2.36, TRAK trades at a premium to the benchmark of 1 for value.

6-Month High

On the chart, shares have been rallying since early October, recently hitting a new multi-year. 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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