Shares of Conns Inc. (CONN - Snapshot Report) touched a new 52-week high of $61.00 on Tuesday, Jul 23, and eventually closed trade at $59.49. The average volume of shares traded over the last 3 months is approximately 521K. The company currently trades at a forward P/E of 22.61x, a 1.5% discount to the industry average of 22.96x.
The last traded price is 3.7% below the Zacks Consensus average analyst price target of $61.78. Shares of this Zacks Rank #1 (Strong Buy) specialty retailer of durable consumer products surged 95.5% since the beginning of the year, riding on consistent share gains in the appliance market, focus on maximizing productivity and initiatives to expand its brand portfolio. The long-term expected earnings growth rate for the stock is 20.3%, well above the industry growth rate of 14.7%.
We expect Conns to continue performing well, given its growth initiatives such as the expansion of store base and the incorporation of technological advancements to serve clients better. The company leverages a wide network of stores to penetrate into its target markets, which enable it to generate healthy sales and gain market share.
Notably, Conns boasts a history of beating the Zacks Consensus Estimate. This durable consumer goods retailer outperformed the Zacks Consensus Estimate in 5 out of the last 6 quarters with an average beat of 12.6%, while reporting in-line earnings in one quarter.
The company reported strong first-quarter fiscal 2014 results on Jun 6, 2013, with earnings of 61 cents per share. This beat the Zacks Consensus Estimate of 56 cents, and surged 74.3% from 35 cents earned in the year-ago quarter.
Conn’s total revenue for the quarter came in at $251.1 million, up 25% from $200.9 million in the year-ago period, and surpassed the Zacks Consensus Estimate of $241 million. Comparable-store sales also climbed 16.5%.
Buoyed by healthy results, management raised its earnings and comparable-store sales guidance range for fiscal 2014. The company now projects fiscal 2014 earnings to come in at $2.50–$2.65 per share, up from $2.40–$2.50 as forecasted earlier. Conns also raised its comparable-store sales growth to 8%–13% from the previous projection of 3%–8%.
Apart from Conns, other retail stocks such as Costco Wholesale Corporation (COST - Analyst Report) , Lowe's Companies Inc. (LOW - Analyst Report) and L Brands, Inc. achieved new 52-week highs of $119.15, $45.16 and $53.45, respectively.