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Aggressive Growth

Earnings momentum for Daktronics Inc. (DAKT - Snapshot Report) soared higher last week after this industrial electrical equipment manufacturer reported a stellar first quarter fiscal 2013 (ended July 28, 2012), which included a 300.0% earnings surprise. With a year-to-date return of 13.6% and shares nearing their 52-week high, this Zacks #1 Rank (Strong Buy) seems to be a solid growth pick.

Upbeat Quarterly Results

On August 21, Daktronics Inc. reported fiscal first quarter 2012 earnings of 16 cents per share, trouncing the Zacks Consensus Estimate of 4 cents and doubling last year’s 8 cents.

Revenue jumped 12% to $133 million, as orders in the quarter increased 24% to $173.5 million. Backlog increased 33% sequentially to $164 million. Gross margin improved 250 basis points to 27.4% on the back of high margin gains in the Live Events and Transportation business units.

Positive Earnings Momentum

Over the last 7 days, three of four estimates increased for fiscal 2013 (ending April 2013), leading to a 45.2% rise in the Zacks Consensus Estimate to 45 cents per share. For fiscal year 2014, one of two estimates moved higher over the same time frame, raising the Zacks Consensus Estimate by 20.5% to 53 cents.

The Zacks Consensus Estimates represent year-over-year earnings growth of 125.0% for fiscal 2013 and 16.7% for fiscal 2014.

Valuation

Daktronics Inc. is currently trading at a price-to-sales (P/S) ratio of 0.8, compared with the peer group average of 1.3. On a forward P/E basis, shares trade at 21.1x, versus the peer group average of 15.3x. The company offers a ROE of 6.0% while the peer group average is at 10.3%.

Daktronics Inc. is based in Brookings, South Dakota and was incorporated in 1968. It operates in the Industrial Electrical Equipment sector; focusing primarily on electronic display systems and related products, as well as related maintenance and professional services. As of April 28, 2012, the company had 28 corporate offices around the world. It currently has a market capitalization of approximately $400 million.

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