Liquidity Services, Inc. (LQDT) is fresh off the heels of an impressive Q1 earnings surprise of 80% that lifted shares to a new 52-week high. With a bullish growth projection and upward estimate revisions, this Zacks #1 rank stock is a solid pick for momentum.
Company Description
Liquidity Services, Inc. operates an online auction marketplace for business and government clients to sell surplus or salvage assets. The company was founded in 1999 and has a market cap of $530 million.
LQDT has been charging higher for most of the year, recently hitting a new multi-year high after reporting strong Q1 results that came in ahead of expectations.
First-Quarter Results
Revenue for the period was up 22% from last year to $92 million. Earnings came in at 18 cents, 80% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 72% over the last four quarters.
The company noted that its record quarter was driven by a strong showing in its DoD (Department of Defense), energy and state and local marketplaces. Liquidity Services also saw a 16% increase in registered buyers, climbing to 1.51 million.
Financial Profile
LQDT emerged from the quarter with its strong balance sheet well intact, with cash and short-term investments up $28 million from last year to $96 million against total debt of just $21 million.
Estimates
We saw some pretty bullish movement in estimates off the good quarter, with the current year jumping 11% to 51 cents while the next-year estimate added 4% to 81 cents, a healthy 60% growth projection.
Valuation
But in spite of the solid gains, the valuation picture still looks compelling, with a PEG ratio (PE/Growth) of .63, well below the traditional benchmark for value of 1.
12-Month Chart
On the chart, shares have been jumping higher since the beginning of the year, recently hitting a new multi-year high on the good quarter. Look for support from the long-term trend on any weakness, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.
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