Cardtronics Upped to Strong Buy

Zacks

On Aug 13, Zacks Investment Research upgraded Cardtronics Inc. (CATM) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Cardtronics has been witnessing rising earnings estimates on the back of solid second quarter 2013 results and an updated guidance for 2013. Moreover, this owner/operator of ATMs delivered positive earnings surprises in 2 of the last 4 quarters with an average beat of 6.7%. The long-term expected earnings growth rate for this stock is 14.4%    

Cardtronics reported second quarter 2013 results on Jul 31. Non-GAAP earnings per share came in at 44 cents, surpassing the Zacks Consensus Estimate of 39 cents by 12.8% and the year-ago earnings of 33 cents by 33.3%.

Earnings were primarily aided by solid top-line growth of 8%, attributable to increase in ATM operating revenues.   

Free cash flow was $25.1 million, up significantly from $3.7 million generated in the year ago quarter.

Cardtronics now expects its earnings per share projection for 2013 in the range of $1.97–$1.84 on revenues of $825–$840 million.

The company’s growth story seems impressive based on the strategic acquisitions.

The Zacks Consensus Estimate for 2013 increased nearly 5% to $1.69 per share as all the estimates were revised higher over the last 30 days. The current estimate is much below the guidance range provided by Cardtronics. For 2014, more than half of the estimates were revised higher over the same time frame, lifting the Zacks Consensus Estimate by 4.8% to $1.96 per share.

Other Stocks to Consider

Business service provider,  comScore, Inc. (SCOR), Interval Leisure Group, Inc. (IILG) and SouFun Holdings Ltd. (SFUN), among others, carry a Zacks Rank #1 (Strong Buy) and look attractive.
 

Read the Full Research Report on CATM

Read the Full Research Report on SCOR

Read the Full Research Report on IILG

Read the Full Research Report on SFUN

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