Back to top

Analyst Blog

Zacks Investment Research upgraded Cardtronics Inc. (CATM - Snapshot Report) to a Zacks Rank #1 (Strong Buy) on Jan 21, 2014.

Why the Upgrade?

Cardtronics witnessed upward estimate on the back of solid results. This financial services company delivered positive earnings surprises in 2 out of the last 3 quarters, with an average beat of 8.6%.

Over the last 30 days, estimates moved north, raising the Zacks Consensus Estimate for full-year 2014 by approximately 2% to $2.09 per share (representing a year-over-year improvement of 19.5%).

Cardtronics’ adjusted net income per share of 51 cents in the last reported quarter improved year over year as well as exceeded the Zacks Consensus Estimate by 15.9%. Businesses acquired in the last year, organic growth initiatives and lower operating costs aided the improvement.

Cardtronics has been on an acquisition spree in the recent past that has supported its global expansion strategies. Particularly, the acquisition of Cardpoint Limited in Aug 2013 helped the company foray into the U.K. and Germany. Other noteworthy deals include the acquisition of Arizona-based CGI Inc., contract extensions with Costco Wholesale and Chevron, and alliances with Texas-based grocery and convenience store chains H-E-B and Timewise Food Stores, respectively.

The aforementioned deals are expected to benefit the company through increased ATM locations worldwide. The launch of the Enterprise Growth Group was a strategic fit as it is expected to bolster growth. The long-term growth rate for this stock is 14.8%.

Cardtronics is scheduled to release its fourth-quarter 2013 results on Feb 6, 2014. The Zacks Consensus Estimate for the fourth quarter is pegged at 43 cents per share, representing a year-over-year improvement of 15.3%.

Other Stocks to Consider

Other players in business services space, which look attractive at current levels, include SouFun Holdings Ltd. (SFUN - Snapshot Report), comScore, Inc. (SCOR - Snapshot Report) and PRGX Global, Inc. (PRGX - Snapshot Report). While SouFun carries the same Zacks Rank as Cardtronics, comScore and PRGX carry a Zacks Rank #2 (Buy).
 

Please login to Zacks.com or register to post a comment.