The Joint Corp ((JYNT - Free Report) ) has been posting some impressive topline growth and that has helped propel some recent earnings estimate revision to the upside. When estimates move higher so does the Zacks Rank and this stock has the highest Zacks Rank #1 (Strong Buy) and it is the Bull of the Day.
The Joint Corp. is a healthcare franchisor of chiropractic clinics. The Company's plans include: Single Visit, Premium Wellness Plan and Wellness Plan. It also provides a family wellness plan. The Company also provides removal of subluxations. It operates its clinics across: Albany, New York; Austin, Texas; Brentwood, California; Fort Mill, South Carolina; Lubbock, Texas; Lynnwood, Washington; Middletown, New Jersey; San Antonio, Texas; San Diego, California and Spartanburg, South Carolina, among others. The Joint Corp. is headquartered in Scottsdale, Arizona.
The earning history is pretty good for JYNT. Over the last four quarters I see two beats, one miss and one NA on the Zacks website. There was no estimate data for one quarter, but looking back at the price and consensus and EPS surprise chart (https://www.zacks.com/stock/chart/JYNT/price-consensus-eps-surprise-chart) you can see of the last 6 quarters where Zacks had estimates, there were 5 beats and one miss.
In looking at the topline for this name, I saw this chart in a company provided presentation:
Revenue growth like that is just what I love to see. Consistent revenue growth tends to help bring in new buyers to a stock.
The Zacks Rank is an algorithm that is based on the movement of earnings estimates over the last 60 days. For JYNT, I see a positive one penny move for this quarter and nothing for next quarter.
The full year 2019 EPS consensus estimate has risen from $0.21 to $0.23. The 2020 EPS consensus estimate has moved from $0.52 to $0.54.
Those two cent moves don’t seem like much but the implied growth rate is what is really attracting more and more investors to this story.
JYNT has some lofty numbers in the valuation department. That style score grade of F is hard to swallow, as is a 124x trailing PE and 77x forward multiple. Given the franchise model, the book value is very low, so the 116x price to book multiple is going to keep that Zacks Value Style Score at an F for some time. That said, the 50% annual topline growth rate is going to draw a lot of attention, even with a 6.8x price to sales multiple.
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