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Nutrisystem, Inc. (NTRI - Free Report) continued with its hot streak as it beat the Zacks Consensus Estimate by 56% in the prime Diet Season quarter. This Zacks Rank #1 (Strong Buy) is expected to see strong double digit revenue growth in 2017.

Nutrisystem is famous for weight loss programs including Nutrisystem Lean13 program, designed to deliver weight loss of up to 13 pounds in the first month. The company also has other branded weight-loss products including Fast 5, Turbo 10 and the South Beach Diet as well as multi-day kits sold at select retail outlets.

Feeding on the healthy food frenzy sweeping the nation, the company's meal choices including 100 foods which do not contain artificial preservatives or flavors.

Plans can also be customized for specialized diets, including those with Type 2 diabetes or pre-diabetes.

Another Quarter, Another Beat

On April 26, Nutrisystem reported first quarter results and beat on the Zacks Consensus Estimate again. It has only missed once in the last 4 years.

It reported earnings of $0.25 versus the consensus of $0.16, which was a beat of 9 cents or 56.3%.

The first quarter is the "Diet Season" quarter, which is the holidays for the diet companies thanks to January new year resolutions.

Nutrisystem's Lean 13 campaign exceeded expectations and its a la carte and shake sales also showed strong growth.

The company also said the launch of the South Beach Diet was meeting its expectations.

Revenue rose 31% to $212.7 million, up from $162.1 million a year ago. It was the 15th consecutive quarter of year-over-year revenue growth.

Gross margins increased 230 basis points to 53.8% from 51.5%.

Raised Full Year Guidance

Given the hot start to the year, it's not a surprise that Nutrisystem raised both revenue and EPS guidance for the year.

Full year revenue is now forecast to be in the range of $650 to $665 million, up from $630 to $650 million.

Earnings guidance is projected at between $1.65 and $1.75 versus the prior range of $1.55 to $1.65.

As a result, the analysts are pushing their estimates higher. The Zacks Consensus for 2017 jumped to $1.70 from $1.54 in the last week. That is earnings growth of 38%.

Even 2018 rose to $1.87 from $1.63, which is another 10% boost in earnings.

Shares Near 2-Year High

Even with the beat and raise, the shares are struggling to move higher.



But they have already had a big move.

They're not cheap. They trade with a forward P/E of 31.4 but investors are buying the terrific growth story.

For investors looking for a fitness/wellness company that is operating on all cylinders, Nutrisystem is one to keep on your short list.

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