Diamond Foods Inc.

Diamond Foods Inc. (DMND - Analyst Report) has been rallying for most of the year as the company has been able to produce impressive results in a very tough environment. Analysts are bullish on the company, with the next-year estimate projecting 35% earnings growth.

Company Description

Diamond Foods, Inc. is a branded food company specializing in nuts and snack products. The company sells it products directly to retailers. Diamond was founded in 1912 and had a market cap of $461 million.

Fourth-Quarter Results

Diamond Foods is created a buzz on the Street after the company reported impressive fourth-quarter results on Sep 25. Revenue was up 1% from last year to $113.15 million. Net income spiraled higher, climbing to $2.6 million from $774,000 in the same period last year. This produced earnings of 16 cents per share, ahead of analyst estimates by 3 cents.

Consistent Results

This was the fourth time in the last four quarters that Diamond has surprised and beaten analyst estimates, having done so by an average of 3 cents, or 15%.

For the full year, Diamond's profits increased to $14.8 million, or 91 cents per share, compared to last year's figure of $8.4 million, or 53 cents per share.

Guidance and Estimates

After the solid quarter, Diamond went ahead and raised its first-quarter guidance, saying it now expects to earn between 60 and 63 cents per share on sales between $190 and $205 million.

The analyst community is bullish on the longer-term prospects of Diamond, with the next-year estimate pegged at $1.68 per share, a 35% earnings growth projection.

Valuations

Based upon the current-year estimate, this stock is trading with a forward P/E multiple of 21X, a premium to the overall market.

The Chart

Shares of DMND have had a great year, trading deep in the green after advancing from less than $20 to above $31, a new 52-week and all-time high. Take a look at the chart below.