Green Mountain Coffee Roasters (GMCR) continues to defy the skeptics, hitting a fresh all-time high after reporting another great quarter that came in ahead of expectations. With estimates jumping higher on the news, this Zacks #1 Rank stock is brewing with momentum.
Green Mountain has been a momentum high flyer for the last 12 months, hitting a string of new highs in spite of skepticism about the sustainability of its growth trajectory. That trend continued on July 27 when the company reported another great quarter that came in well ahead of expectations.
Third-Quarter Results
Revenue for the period was up 127% from last year to $717 million. Earnings also looked great, coming in at 49 cents, 36% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 20% over the last four quarters.
The great quarter was driven by strong results from the company’s Kuerig brewing system, with sales up 66% to $105 million, and its individual brew packets, where sales jumped 136% $485 million. With those kinds of gains in hand, its clear what is fueling shares and the lofty valuation.
Estimates
We have seen some solid movement in estimates off the good quarter, with the current year gaining 18 cents to $1.65 while the next-year estimate added 42 cents to $2.60, a bullish 58% growth projection.
Valuation
On the valuation front, contrary to popular opinion, GMCR looks reasonably priced, with a PEG ratio of .88, safely below the benchmark of 1 for value.
12-Month Chart
On the chart, shares gapped higher on the good quarter for a new 52-week high. Take a look below.
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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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