Why Conn's Shares Soared

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of electronics and home appliances retailer Conn's (NAS: CONN) surged 18% today after its quarterly results and guidance topped Wall Street expectations.

So what: The company's fourth-quarter beat was so wide -- adjusted EPS of $0.34 versus the consensus of $0.29 -- that analysts have no choice but to raise their growth estimates yet again. Comparable store sales increased 12.1%, while margins continued to improve, suggesting that its turnaround momentum isn't about to slow anytime soon.


Now what: Looking ahead, management now sees 2013 EPS of $1.20-$1.30, up nicely from its prior view of $1.05-$1.15. "We are on track with our store opening plans and are looking forward to returning to unit growth after a period of retrenchment," Chairman and CEO Theodore Wright said. With the stock now up a whopping 270% over the past year and trading at a forward P/E of 15, however, much of that the growth might already be baked into the price.

Interested in more info onConn's?Add it to your watchlist.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. 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 Fool's disclosure policy always gets a perfect score. 

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners