Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Rising earnings estimates on the back of strong fiscal fourth-quarter 2012 results –– including a 36.2% earnings surprise –– and an enhanced guidance for fiscal 2013 helped Green Mountain Coffee Roasters Inc. (GMCR - Analyst Report) achieve a Zacks #1 Rank (Strong Buy) on November 30. Moreover, this well-known coffee maker delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 36.3%.    

The stock is currently trading at a 48.5% discount to its 52-week high of $71.15. With a discounted price and long-term expected earnings growth rate of 17.9%, this stock offers an attractive investment opportunity.

What Makes It Hot?

Green Mountain reported fiscal fourth-quarter (ended September 29) results on November 27. Non-GAAP earnings per share came in at 64 cents, surpassing the Zacks Consensus Estimate and year-ago earnings of 47 cents by 36.2%. Due to a unique calendar shift, the quarter included an additional week, which contributed about 7 cents to the earnings.

Earnings were primarily aided by a solid top-line growth of 33.0% and a 15.2% decrease in interest expense. For fiscal 2012, the company generated $76.7 million in free cash flow versus cash outflow of $282.7 million a year ago.   

Based on its progress, the company raised its earnings per share projection for fiscal 2013 to $2.64–$2.74 from $2.55–$2.65. However, its net sales guidance –– growth between 15% and 20% over fiscal 2012 –– was reiterated.

Estimate Revisions Confirm Strength

The Zacks Consensus Estimate for fiscal 2012 increased 6.4% to $2.66 per share on the back of 10 out of 11 upward estimate revisions over the last 30 days. The current estimate is within the guidance range provided by Green Mountain.

For fiscal 2014, 4 out of 7 estimates were revised higher over the same time frame, lifting the Zacks Consensus Estimate by 13.8% to $3.05 per share.

Among other coffee makers, Farmer Brothers Co. (FARM - Snapshot Report) carries a Zacks #1 Rank (Strong Buy) and Starbucks Corporation (SBUX - Analyst Report) holds a Zacks #2 Rank (Buy).

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

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%