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Bull of the Day

The Container Store (TCS - Free Report) is a retailer that opened 10 new stores in 2015 but pulled back on new openings for 2016. The company is also looking at smaller square foot stores in 2017. Investors like to see growing stores and growing store size to drive sales ever higher, but this stock was able to post an excellent beat and raise quarter. TCS is Zacks Rank #1 (Strong Buy) and is Bull of the Day.

Why I Like It

This is a small-cap stock, and small caps have been running lately.

A good recent earnings history when compared to the Zacks Consensus Estimate.

Recent jump higher in earnings estimates.

The company posted a beat and raise quarter on November 9.

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The Recent Numbers

I like to do a review of the most recent quarter for stocks that I highlight as Bulls of the Day. TCS reported the September 2016 quarter on November 9 and beat on the bottom then guided higher.

The company posted EPS of $0.07 when the Zacks Consensus Estimate was calling for $0.04. Revenue came in $1M below expectations for a 0.7% negative revenue surprise. As a result, the stock was bid up by more than 4.3% in the session following the report.

The company issued guidance for EPS of $0.20-$0.30 when the Zacks Consensus Estimate was calling for $0.23. At the time, the Wall Street estimate was calling for $0.19.

Description

The Container Store is a retailer of storage and organization products in the United States. As of May 9, 2016, it operated 79 store locations with an average of 25,000 square feet each. The Container Store was founded in 1978 and is headquartered in Coppell, Texas.

Earnings History

The company has a good history of beating the Zacks Consensus Estimate. There have been two miss in the last two years.

CONTAINER STORE Price and EPS Surprise

CONTAINER STORE Price and EPS Surprise | CONTAINER STORE Quote

Estimates

The estimate picture looks really good, with the Zacks Consensus Estimate for FY17 moving from $0.23 in October to $0.27 in November. The estimate for FY18 moved from $0.25 to $0.33 over the same time.

Valuation

The valuation for TCS is one that I really like to see. The forward PE of 22x is well below the industry average of 27x. The company trades below the industry average for price to book (1.4x compared to 4.2x) and price to sales (0.4x compared to 3x).

Chart

Zacks has developed a chart that helps investors see how earnings estimates have impacted the price of the stock over the last several years. We call this chart the price and consensus chart, and each color-coded line represents analyst estimates over a designated year. As estimates increase, the stock tends to follow. The Zacks Rank is impacted by earnings estimate increases, beats and incorporates the idea of analyst agreement and magnitude. As a Zacks Rank #1 (Strong Buy) we see that estimates are moving higher.

CONTAINER STORE Price, Consensus and EPS Surprise

CONTAINER STORE Price, Consensus and EPS Surprise | CONTAINER STORE Quote

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