Titan Machinery, Inc.

Titan Machinery Inc. (TITN - Snapshot Report) saw a 62% jump in revenue in the third-quarter 2009 as the agriculture sector continues to be robust in the Upper Midwest. After reporting the great quarter, the company raised its 2009 guidance. TITN is trading at 12.6x forward earnings.

Company Description

Titan Machinery operates 52 full service agriculture and construction equipment stores in North America, specifically in North and South Dakota, Minnesota, Iowa and Nebraska.

The company is a dealer for Case IH, Case Construction, New Holland, and New Holland Construction equipment. It operates in three business segments: Equipment, Parts, and Service.

Titan Crushes Third-Quarter 2009 Wall Street Estimates

On Dec 15, Titan announced its third quarter 2009 results which blew away Wall Street estimates by 95.65%. Net income surged 204% to $8.2 million from $2.7 million in the year ago period.

The company went public in December 2007 with 7,675,831 shares and had a follow-up offering in May 2008 which increased share count to 18,041,197. Accounting for the increase in shares, the company reported earnings per share of 45 cents compared with 36 cents per share in the third quarter of 2007. The one covering analyst expected 23 cents.

Revenue soared 62% to $214 million from $132.2 million a year ago. The company attributed the jump to the continued strength of the agriculture economy, acquisitions, and organic growth.

All three of the company's segments saw revenue growth. Equipment sales jumped 62.4% to %168 million from $103.4 million in 2007. Parts sales gained 62% to $29.8 million from $18.4 million. Services grew 63% to $12.9 million from $7.9 million in the year ago period.

During the third quarter of 2009, Titan closed on 2 acquisitions in North and South Dakota consisting of 4 stores with historical revenues of $63 million.

Titan Raises 2009 Guidance

The company continues to see a strong pipeline of acquisition candidates as well as opportunity for organic growth, including increased growth for the fourth quarter, and therefore raised 2009 full-year guidance.

For the fiscal year 2009, ending on Jan 31, 2009, Titan forecasts revenue in the range of $635 million to $675 million compared to the previous guidance of $590 million to $635 million.

Earnings per share increased to a range of $1.07 to $1.11 from prior guidance of 89 to 94 cents.

The one covering analyst raised 2009 estimates to $1.09 from 93 cents in the last week, which is within the forecast range.

Value Fundamentals

Titan Machinery is a Zacks #1 Rank (strong buy) stock. It has surprised on estimates 3 out of 4 quarters by an average of 69.14%.

TITN is trading at 12.6x forward earnings. The company has a price-to-book of 1.43.