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Bull Of The Day: Carbonite (CARB)

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Carbonite (CARB) is a Zacks Rank #1 (Strong Buy) and it has a Growth Style Score of A, so you know that it is on my radar screen.  I am like aggressive growth stocks and this one fits the bill.  Let's see why in this Bull of the Day article.


Carbonite Inc. is a computer service company which provides online backup solutions for consumers and small and medium sized businesses to retrieve files if lost on the internet. The Company's backup solutions work automatically and continuously uploading encrypted copies of its customer's files to the servers known as Carbonite Personal Cloud. Carbonite Inc. is headquartered in Boston, Massachusetts.

Recent Earnings

CARB beat expectations back on Feb 7, when the company reported EPS of $0.45 which was $0.03 ahead of the Zacks Consensus Estimate.  Revenues were just a little shy of expectations at $77M but that was still good for nearly 25% annual growth.

Guidance was soft, with next quarter looking at $77M - $78M when the consensus was calling for $80.4M.  That is the sort of thing you don't want to see.

The end result was the stock was crushed following the report, down as much as 19% that day and  more than 16% for the week of the earnings report.

Buy That Dip

So here is the rub, the stock gets beat up and the estimates for this quarter fall by four cents and by a penny for next quarter.  That is basically all the damage as the 2019 number fell by 5 cents.

The 2020 number, however, is up from $1.90  60 days ago to $1.99.  So in the short term we have some falling estimates but the long term has them rising.

That sets up for a perfect dip for investors to be confident to buy.



Carbonite, Inc. Price and Consensus

Carbonite, Inc. Price and Consensus | Carbonite, Inc. Quote

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