Heartland Payment Systems, Inc. (HPY) has been a top performer in 2011, gaining more than 25% in spite of recently pulling back with the market. With a strong Q2 results in hand and rising estimates, this Zacks #1 Rank stock offers plenty of momentum.
Company Description
Heartland Payment Systems, Inc. provides bank card payment processing services in the United States and Canada. The company was incorporated in 2000 and has a market cap of $788 million.
Shares of HPY recently jumped into a new multi-year high after reporting strong Q2 results that came in ahead of expectations.
Second-Quarter Results
Revenue for the period was up 6% from last year to a record $122 million. Earnings also came in strong at 31 cents, 15% ahead of the Zacks Consensus Estimate.
The good quarter was driven by solid same-store sales growth, up 2.5% from last year as small and mid-sized merchant hit a quarterly record of $17.5 billion, up 7.2%.
Financial Profile
With strong earnings momentum in hand, the company continues to strengthen its balance sheet, with cash and short-term investments up $6 million from last year to $78 million while total debt fell $15 million $127 million.
Estimates
We saw some decent movement in estimates off the good quarter, with the current year adding 5 cents to $1.04 while the next-year estimate gained 6 cents to $1.23, a bullish 18% growth projection.
Valuation
But in spite of the gains, the valuation picture still looks solid, with a PEG ratio just over 1, the traditional benchmark for value.
12-Month Chart
On the chart, shares recently hit a new 52-week high before pulling back a bit with the market. 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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