On Sep 13, Zacks Investment Research upgraded Cardtronics Inc. (CATM) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Solid second quarter results along with an updated guidance for 2013 drove rising earnings estimates for Cardtronics. This global owner/operator of ATMs delivered positive earnings surprises in 2 of the last 4 quarters, with an average beat of 6.7%. The long-term expected earnings growth rate for this stock is 14.4%
On Jul 31, Cardtronics reported second-quarter non-GAAP earnings per share of 44 cents, which surpassed the Zacks Consensus Estimate of 39 cents by 12.8% and the year-ago earnings of 33 cents by 33.3%. A revenue increase of 8%, attributable to increase in ATM operating revenues, fueled the outperformance.
Following a strong second quarter, Cardtronics expects earnings in 2013 between $1.79 and $1.84 per share. The company expects to generate $825–$840 million in revenues in 2013.
The company’s growth story seems impressive based on its strategic acquisitions.
Additionally, Cardtronics, in its effort to further strengthen its focus on growth and profitability, launched Enterprise Growth Group. This new internal organization will work on strategic initiatives like new product development, mergers and acquisitions, strategy development, and business analytics.
The Zacks Consensus Estimate for 2013 moved up by 6.2% to $1.71 per share as all the estimates moved north over the last 60 days. The current estimate is below the guidance range provided by Cardtronics. For 2014, 2 of 3 estimates moved upward over the same time frame, pushing the Zacks Consensus Estimate by 10.7% to $2.01 per share.
Other Stocks to Consider
Business service providers, comScore, Inc. (SCOR), Interval Leisure Group, Inc. (IILG) and SouFun Holdings Ltd. (SFUN), among others, carry a Zacks Rank #1 (Strong Buy) and look attractive.
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