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Dycom Industries (DY - Free Report) analysts are expecting excellent growth over the next 2 years, in light of the last earnings report. While it has been a bumpy road, the earnings expectations haven't been this high in years for this Zacks #1 Rank (Strong Buy).

Company Description

Dycom Industries offers specialty contracting services including engineering, construction, and maintenance for the telecom, electric, and gas utilities.

Back-to-Back Surprises

On Aug 23 Dycom reported its fourth-quarter and full-year results. Earnings for the quarter came in above expectations at $0.38 per share, beating the Zacks Consensus by 14 cents. The company doubled the consensus last quarter with EPS of $0.10.

Organic contract revenue grew 11%, to $304 million during the quarter and eclipsed $1 billion on the year, which was a 4% gain.

Estimates Move Higher

Analysts upped their expectations for fiscal 2012 after the 2011 results were out, sending the Zacks Consensus Estimate 18 cents higher, to $0.92. Next year's average forecast rose 5 cents, to $1.27.

Last year Dycom made $0.61 per share, so projected growth rates now stand at 51% and 39%, respectively.


You will have to open up the purse strings a bit to get into DY at this point. The forward P/E is at 19 times and the PEG is 1.6. However, many investors look to P/S for small caps and DY's is at 0.5 times, not a bad deal there. Additionally, shares are going for 1.6 times book value.

The Chart

Shares have been volatile, along with the market. But you can see below that earnings forecasts are at the highest levels in years. If you can stomach the volatility, there could be some nice gains in DY.

Dycom Industries  - ticker DY>

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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