Cardtronics Inc. - Aggressive Growth
July 12 2011 - 8:00PM
Zacks
Cardtronics (CATM) may have missed on its last EPS number,
but analyst and investors are still buying in. Estimates are
showing double-digit growth and shares are currently a Zacks #1
Rank (Strong Buy).
Company Description
Cardtronics is the biggest non-bank owner of ATMs. The company
has over 33,000 machines in the North America and the U.K. Popular
locations include 7-Eleven, Chevron, Costco and others.
Additionally, they offer services to small banks and other card
issuers at over 12,000 locations.
Miss, but a Good Quarter
Even though the company fell short of bottom-line expectations,
analysts and investors still liked the results enough to keep
buying shares. Revenue for the first quarter were up 8%, to $138
according to the Apr 28 press release.
Margins also improved as well as transaction counts. Earnings
per share came in 2 cents below expectations though, at $0.22. That
miss snapped a 4-quarter streak of beating expectations. But they
could get back on track when they report again, which should be a
month or so.
Double-Digit Growth
Right now the full-year Zacks Consensus Estimate for 2011 is at
$1.12, which is 14% higher than 2010. Next year's estimates are
averaging $1.34, good enough for a 20% growth rate.
Valuation Picture
Shares are trading around 21 times forward estimates, which puts
the PEG ratio near 1.5 times. Not really a value story there, but
not so high that shares should be written off. The P/S is at
1.9.
What might get investors to look past the valuation is the
astronomical 150% ROE and a 10% ROA. Both metrics lead the peer
group.
The Chart
Shares of CATM have been red hot for some time now. Some may
wait until shares look less "over bought" but that momentum could
resume any moment for this Zacks #1 Rank (Strong Buy).
Cardtronics (NASDAQ:CATM)
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