Why Conn's Inc. Shares Soared

Why Conn's Inc. Shares Soared

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 Conn's, were flying today, up as much as 23%, after cruising past estimates in its third-quarter earnings report.

So what: The big-box retailer saw same-store sales jump 35%, driving per-share earnings of $0.71, which beat estimates of $0.64. Overall revenues increased 50.6%, to $310.9 million, easily topping the analyst consensus at $288.6 million. CEO Theodore Wright was optimistic that the strong results would continue, noting that comps rose 32% in November after the previous quarter ended. Conn's also expects to have 20 to 25 new stores open by the end of next year, lifting the total store count to close to 100.

Now what: Full-year guidance was similarly strong as Conn's now expects EPS for the year at $2.75-$2.80, up from its previous projection of $2.50-$2.65. Analysts had expected just $2.60. Furthermore, the company initiated EPS guidance for fiscal 2015 at $3.80-$4.00, also ahead of estimates. Based on that outlook, the retailer has a forward P/E of just 18, which looks like a steal for a company growing this fast. If it can keep up its store expansion and maintain solid same-store sales, shares should continue to move higher.

One growth stock for 2014
Conn's crushed it in 2013, but who will be the big winner in 2014? Find out in our brand new report: "The Motley Fool's Top Stock for 2014." To learn the name of this stock it is and read our in-depth report, simply click here. It's free!

The article Why Conn's Inc. Shares Soared originally appeared on Fool.com.

Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks 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 Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Originally published