Monro Muffler Brake, Inc. (MNRO: 47.40 0.00 0.00%) is looking like a Momentum all-star, recently hitting a new all-time high ahead of its excellent Q2 results that came in ahead of expectations. With consistent earnings on the board and a bullish growth projection, this Zacks #2 rank stock is tipping the momentum scale.
Monro provided the Street with an update on its business on Oct 21 with solid Q2 results that once again beat expectations.
Second-Quarter Results
Revenue for the period was up 19% from last year to $162 million. Earnings also looked good at 63 cents, 3% ahead of the Zacks Consensus Estimate, where the company now has an average earnings surprise of 7% over the last four quarters.
Although the results were helped by acquisitions, same-store sales were still awesome, up 6.4% after growing 7.4% in the same period last year, with tires, shocks and maintenance services leading the way with 10%, 9% and 8% growth respectively.
Solid Balance Sheet
Monro has also been busy strengthening its balance sheet, with its total debt down $11 million from last year to $89 million against a marginal cash position of $3 million. Its debt-to-equity ratio of 35% is well ahead of the industry average of 49%.
Guidance
Monro also boosted its guidance on the good quarter, saying it now expects fiscal 2011 EPS between $2 and $2.06, up from the previous $1.94 to $2.01.
Valuation
Although shares trade with a forward P/E of 23X, its PEG ratio of 1.09 is only a pinch away from the value benchmark of 1.0.
2-Year Chart
On the chart, shares have been trending higher for most of the last 18 months before recently hitting a new multi-year high at $50.81 ahead of the good quarter. But in spite of the gains, the stochastic below the chart is signaling that shares are trading well away from over-bought territory, take a look below.
Read the Aug 16 MNRO article here
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Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service.
