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Vitamin Shoppe, Inc. (VSI - Free Report) continues to improve since its November feature as a Zacks Rank Buy.

The company has topped estimates in all but 1 quarter since its 2009 IPO. Thanks to the most recent surprise, analysts are raising estimates which gave VSI a Zacks #1 Rank (Strong Buy).

Company Description

Vitamin Shoppe is a retailer of nutritional products like vitamins, minerals, supplements, homeopathic remedies and other similar items. The company owns more than 500 stores and also sells through catalogs and its website.

Strong Comps

On Apr 26 Vitamin Shoppe reported better-than-expected quarterly results, driven by an 8% increase in same store sales. Revenue was up 13%, to $217 million.

Income from operations rose 15%, to $20.8 million and let to earnings per share of $0.49. That mark topped the Zacks Consensus Estimate by 9 cents and was the company's fifth surprise, of 6 quarters since its IPO. Vitamin Shoppe met expectations in the fourth quarter last year.

Better Forecasts

After analysts got the news they quickly started raising their full-year projections. The 2011 Zacks Consensus Estimate rose by the 9 cents that they beat by, to $1.48. But the 2012 estimates rose as well, 11 cents to $1.73.

Given the $1.06 they Vitamin Shoppe earned in 2010, the projected growth rates are now 40% for this year and 17% for next year.

Even after the upward revisions, the forward P/E looks a bit lofty at almost 27 times. But, when you consider the 25% long-term growth rate you get a PEG ratio of 1.1, so the price is right for growth investors.

Did I Miss the Party

Shares also jumped on the earnings news, which kept that P/E inflated, but it's not too late to make a buck off of VSI. The stock's initial jump was muted by overall market woes last week, but there is still some potential here if traders are willing to take on the risk.

Read the November 2nd Feature Here

Vitamin Shoppe, Inc. - ticker VSI >

Bill Wilton is the Aggressive Growth Stock Strategist for He is also the Editor in charge of the Zacks Small Cap Trader service

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