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BJ's Restaurants (BJRI) Up 7.7% Since Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for BJ's Restaurants, Inc. (BJRI - Free Report) . Shares have added about 7.7% in that time frame, outperforming the market.

Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

BJ's Restaurants Tops Q4 Earnings & Revenue Estimates

BJ’s Restaurants reported better-than-expected fourth-quarter 2016 results with both earnings and revenues surpassing the Zacks Consensus Estimate.

Earnings and Revenue Discussion

Adjusted earnings of $0.55 per share surpassed the Zacks Consensus Estimate of $0.40 by 37.5%. Further, earnings increased 27.9 % from the year-ago figure of $0.43, primarily due to higher revenues.

Revenues of $265.6 million were up nearly 14% year over year owing to new restaurant growth. Moreover, revenues topped the consensus mark of $264.7 million by 0.3%.

Inside the Headline Numbers

Comps in the quarter declined 2.2% in comparison with the prior-quarter comps decrease of 3.4 % and the year-ago quarter comps growth of 0.7%. Though the company’s comps declined mainly due to a challenging sales environment, it outpaced the industry’s comps in the fourth quarter.

Restaurant level margin was 18.7%, down 120 basis points (bps) year over year. Moreover, operating margin decreased 50 bps to 6.3%. A 100 bps increase in cost of sales, as a percentage of total revenues, was more than offset by a 50 bps and 20 bps decline in occupancy and operating costs as well as general and administrative expenses, respectively.

2016 Results

BJ’s Restaurants’ full-year adjusted earnings of $1.88 came above the Zacks Consensus Estimate of $1.73 by 8.7%. Furthermore, it increased 13.9% from the year-ago quarter figure of $1.65 on the back of higher revenues.

Full-year revenues of $993.1 million slightly topped the Zacks Consensus Estimate of nearly $992 million and increased 8% year over year.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed a downward trend in fresh estimates. There have been eight revisions lower for the current quarter. In the past month, the consensus estimate has shifted lower by 31% due to these changes.

VGM Scores

At this time, BJ's Restaurants' stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.

Zacks' style scores indicate that the company's stock is suitable for value and growth investors.

Outlook

Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift.  Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.


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