Polaris Industries, Inc. (PII) recently jumped into a new all-time high after reporting strong Q2 results that included a hefty 16% earnings surprise. With estimates on the rise and a bullish growth projection, this Zacks #1 rank stock has more than a recreational interest in momentum.
Company Description
Polaris Industries, Inc. designs and manufactures off-road, recreational and specialty utility vehicles worldwide. The company was founded in 1987 and has a market cap of $4.2 billion.
Polaris has been having a great year, recently hitting a new all-time high after reporting strong Q2 results that came in ahead of expectations.
Second-Quarter Results
Revenue for the period was up 41% from last year to $608 million. Earnings also came in strong at $1.37, 16% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 33% over the last four quarters.
The good quarter was driven by a strong showing in North American retail sales, where revenue was up 19% from last year. The company’s attention to costs and expenses was also on display, with gross margin expanding 300 basis points. The company also noted that its new production facility in Monterrey, Mexico will further that trend.
Financial Profile
The company’s financial profile showed huge signs of progress from last year, with cash and short-term investment up $96 million from last year to $262 million while total debt fell by 50% to $100 million.
Estimates
We saw some solid movement in estimates off the good quarter, with the current year adding 7% to $6.23. The next-year estimate is up 37 cents in the same time to $7.30, a bullish 17% growth projection.
Valuation
But in spite of the gains, the valuation picture still looks solid, with a forward P/E of 20X a discount to its peer average of 24X.
12-Month Chart
On the chart, shares hit a new all-time 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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