KRA Kraton Corporation

Zacks #1 Rank (Strong Buy) stock Travelzoo Inc. (TZOO) knocked it out of the park on Thursday, soaring 28% after reporting excellent Q1 results.

The travel deals website reported EPS of 37 cents, well ahead of the Zacks Consensus Estimate of 28 cents. It was a 147% increase over the same quarter last year.

Revenue came in at $37.0 million, crushing the Zacks Consensus Estimate of $33 million. It was a 30% jump year-over-year. Subscribers grew by over 1 million, the second best performance in company history.

Revenues in North America surged 23%, its fastest pace in over 4 years. Europe was hot too, with revenue jumping 53% due to its highest quarterly subscriber growth ever.

Meanwhile, operating income rose a remarkable 94%.

Expect to see earnings estimates revised significantly higher for TZOO over the next few days.

Just don't expect to see Travelzoo on any lists of value stocks. Shares trade at 81x forward earnings, a significant premium to the industry average of 26x. Nonetheless, with a strong earnings report and rising estimates, TZOO could be heading higher over the next few months.

Kraton Performance Polymers, Inc. (KRA) came in a distant second, but closed up a respectable 9.5%.

Kraton manufactures engineered polymers and styrenic block copolymers (SBCs). These products are used across a wide range of products such as adhesives, coatings, personal care products, sealants and lubricants, footwear products, paving and roofing products.

Estimates have been soaring since the company reported a solid earnings beat on March 2. Q4 EPS came in at 44 cents, ahead of the Zacks Consensus Estimate of 41 cents. This marked the company's 4th consecutive positive earnings surprise.

Sales were up 21% due to higher sales volume and prices.

The Zacks Consensus Estimate for 2011 is $3.96, up from $3.56 before the latest earnings beat. This represents 21% growth over 2010 EPS.

Valuation looks attractive here with shares trading at 11.5x forward earnings, a discount to the industry average of 14.8x.

Other notable top performing Zacks #1 Rank stocks from Thursday include: Numerex Corp. (NMRX), which was up 8.6%, CNH Global (CNH), which rose 6.0%, and Shanghai Industrial Holdings (SGHIY), which gained 5.6%.

To see the full list of Zacks #1 Rank (Strong Buy) stocks click here.

Todd Bunton is the Growth & Income Stock Strategist for Zacks.com.

 
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