Cabela's Earnings Preview

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After beating estimates last quarter by $0.06, Cabela's (NYS: CAB) has set the standard for itself. The company will unveil its latest earnings on Thursday, Feb. 16. Cabela's is a specialty retailer and a direct marketer of hunting, fishing, camping, and related outdoor merchandise.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Cabela's, with six of nine rating it a buy and the remainder rating it a hold. Analysts like Cabela's better than competitor Hibbett Sports overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $963 million in revenue this quarter. That would represent a rise of 3.1% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.99 per share. Estimates range from $0.98 to $1.02.

What our community says:
CAPS All-Stars are solidly behind the stock, with 97.1% awarding it an "outperform" rating. Most of the community is in line with the All-Stars, with 90.7% granting it a rating of "outperform." Fools are keen on Cabela's and haven't been shy with their opinions lately, logging 302 posts in the past 30 days. Even with a robust four out of five stars, Cabela's CAPS rating falls a little short of the community's upbeat outlook.

Management:
Cabela's profit has risen year-over-year by an average of more than twofold over the past five quarters. Revenue has now gone up for three straight quarters. The company raised its gross margin by 2.7 percentage points in the last quarter. Revenue rose 5.5% while cost of sales rose 0.8% to $387.5 million from a year earlier.

Now let's get some insight into how efficient management is at running the business. Traditionally, margins serve as an illustration of how efficiently a company captures portions of sales dollars. Cabela's has seen increasing net margins year-over-year for the last four quarters. Net margins reflect what percentage of each dollar earned by the company becomes profit. Here is how Cabela's has been doing for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

42.9%

45.0%

41.8%

39.9%

Operating Margin

7.9%

6.6%

5.3%

11.1%

Net Margin

4.9%

3.9%

3.0%

7.1%

For all our Cabela's-specific analysis, including earnings and beyond, add Cabela's to My Watchlist.

At the time this article was published Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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