Shares of technology company, Planar Systems Inc. (PLNR), hit a new 52-week high of $8.48 on Dec 26 and eventually closed at $8.18. The company delivered a one-year return of about 203.7% and year-to-date return of roughly 221.7%. Average volume of shares traded over the last three months was nearly 908K.
Why the Uptrend?
Planar Systems is a digital display manufacturer which offers electronic display products and systems for the display signage market, and commercial and industrial display markets. Its products are sold to retailers, educational institutions, government agencies, businesses, utilities and energy firms, and home theater enthusiasts under the Planar, Clarity and Runco brands primarily in North America, Europe and Asia.
Planar Systems stands to benefit from the advanced display technologies creating increased demand for its growing suite of leading ultra high-definition televisions, known as 4K LCD offerings. These 4K televisions have a higher average screen size, with higher resolution and more pixels than 2D and Full HD TVs.
Additionally, the company gained solid momentum from its strong fundamentals and better-than-expected fourth-quarter fiscal 2014 results released on Nov 5, 2014. Since then, the stock soared 121.1%.
Planar Systems’ top line increased 17% year over year to $53.6 million, primarily due to strength in its Digital Signage (DS) products. Sales of DS products totaled $21.4 million, up 53% from the year-ago quarter. Non-GAAP earnings came in at 13 cents per share, which surpassed the Zacks Consensus Estimate of 7 cents.
The company also provided positive first-quarter fiscal 2015 guidance. Planar expects to see continued strong revenues in digital signage and custom Commercial and Industrial (C&I) products. Therefore, the company anticipates revenues in the range of $55–$58 million, representing a 36% to 43% year-over-year growth. Non-GAAP earnings are expected in the range of 15 to 18 cents, while the Zacks Consensus Estimate is pegged at 14 cents.
Planar Systems’ strong revenue growth, solid financial conditions and reasonable debt levels position the company favorably. Also, strong demand for the company’s products, coupled with improving manufacturing throughput, has significantly boosted the company’s revenues and profits in 2014.
Moreover, the stock has seen a cumulative upward earnings estimate revision of 133% for the current quarter and 41.7% for the fiscal year, over the last 60 days. The Zacks Consensus Estimate for revenues increased 9.6%, while that for earnings jumped a significant 60.3% for fiscal 2015 from the prior year. Additionally, it has delivered a massive average earnings surprise of nearly 209% over the trailing four quarters.
Planar Systems currently sports a Zacks Rank #1 (Strong Buy).
Other Stocks to Consider
Some well-placed technology stocks include Alps Electric Co. Ltd. (APELY), Analogic Corporation (ALOG) and Mercury Systems, Inc. (MRCY), all carrying a Zacks Rank #1.
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