PriceSmart, Inc. (PSMT) has been a winner in the weak market, trading near its recent 52-week high after reporting strong Q2 results that came in ahead of expectations. With an average earnings surprise of 15% over the last four quarters and bullish 18% growth projection, this Zacks #1 Rank stock offers momentum in bulk.
Company Description
PriceSmart, Inc. owns and operates warehouse clubs in the United States, Latin America and the Caribbean. The company was founded in 1994 and has a market cap of $1.71 billion.
Food stocks have been holding up relatively well in the recent sell off as investors shift into more conservative segments of the market like consumer staples and utilities. That and strong Q2 results from early July have PSMT trading near its recent 52-week high.
Second-Quarter Results
Total revenue for the period was up 24% from last year to $431 million. Earnings also came in strong at 52 cents, 11% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 15% over the last four quarters.
Financial Profile
PriceSmart has been able to use its earnings momentum to strengthen its balance sheet, with cash and short-term investments up $11 million from last year to $67 million against total debt of just $72 million.
Estimates
We saw some decent movement in estimates off the good quarter, with the current year adding 8 cents to $2.11 while the next-year estimate gained 17 cents to $2.48, a bullish 18% growth projection.
Valuation
In light of the recent string of gains, shares do look a bit pricey, trading with a PEG ratio of 1.44, a premium to the traditional benchmark for value of 1.
12-Month Chart
On the chart, PSMT has held up incredibly well in the recent sell off, with shares remaining within striking distance of the recent 52-week high at $62.27. Take a look at the chart 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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