Red Robin Gourmet Burgers, Inc. (RRGB) recently spiked into a new multi-year high after reporting an impressive 142% Q1 earnings usrprise. Estimates saw huge revisions on the news, making this Zacks #1 rank stock a sizzling play on momentum.
Company Description
Red Robin Gourmet Burgers, Inc., together with its subsidiaires, develops and franchises casual dining restaurants in the United States and Canada. The company was founded in 1969 and has a market cap of $415 million.
Although RRGB has been grinding higher for most of the year, shares took a quantum leap higher in mid May after reporting strong Q1 results that came in well ahead of expectations.
First-Quarter Results
Revenue for the period was up 4% from last year to $287 million. Earnings looked even better, coming in at 58 cents, 142% ahead of the Zacks Consensus Estimate.
Total restaurant revenue was up 5.2% from last year, while company-owned comparable-store sales increased 1.9%.
Shares Repurchased
Red Robin returned some value to its shareholders during the quarter, buying back 397,000 shares of common stock for $9.5 million.
Financial Profile
The company has also been focused on strengthening its balance sheet, with total debt down $28 million from last year to $142 million against cash and short-term investments of $15 million, up marginally from last year.
Estimates
We saw some very bullish movement in estimates off the good quarter, with the current year jumping 50% to $1.50. The next-year estimate is pegged at $1.82, a solid 21% growth projection.
Valuation
In light of recent gains RRGB does look a bit pricey, trading with a forward P/E of 22X, a premium to its peer average of 15X.
12-Month Chart
On the chart, shares jumped into a new multi-year high on the good quarter. But in spite of the gains, the stochastic below the chart is signaling that shares are trading in oversold territory. Look for support from the long-term trend, 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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