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Bull of the Day

Nutrisystem, Inc. (NTRI - Free Report) is on the right side of the health and wellness debate. This Zacks Rank #1 (Strong Buy) just raised full year guidance for the second time this year.

Nutrisystem is famous for weight loss programs including Nutrisystem My Way, its 28-day food delivery program. 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 Beat and Raise

On July 29, Nutrisystem reported its second quarter results and beat the Zacks Consensus Estimate by 4 cents. Earnings were $0.41 compared to the consensus of $0.37.

Revenue rose 17% to $130.3 million as both direct and retail channels remained strong. Diret rose 15% year over year while retail grew 43%.

Gross profit margin jumped 80 basis points to 52%.

Full Year Guidance Raised

Very few companies are beating and raising this year in tough market conditions, but momentum from early in the year continued. It raised full year guidance for the second quarter in a row.

Earnings are now expected to be in the range of $0.87 to $0.97 up from its previous guidance of $0.81 to $0.91. Guidance is now up sharply from earlier in the year when the company was only looking for $0.73 to $0.83.

The analysts all moved to raise estimates, again. That pushed the Zacks Consensus Estimate up to $0.94 from $0.88 before the earnings report.

That is 2015 earnings growth of 42%.

Analysts remain bullish on 2016 as well, with another 20% earnings growth expected.

Shares Soar to New Highs

The consumer is spending again and Nutrisystem is taking advantage of it.

After the earnings report, the shares soared to new 2-year highs.

You're not getting the shares cheap anymore. Nutrisystem has a forward P/E of 31.

But with double digit growth and rising estimates, Nutrisystem is a growth and momentum stock you'll want to keep on your short list.

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Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec.


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