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Bull Of The Day: The Container Store (TCS)

Brian Bolan

The Container Store (TCS) is a Zacks Rank #2 (Buy) with a set of A's for the Zacks Style Score.  As the aggrssive growth stock strategist here at Zacks Invesment Research, I prefer to see a divergence in growth and value.  That will tell me that I am on the right track as a low value score and a high growth score means growth is favored in a particular name.  In the case of TCS, there are A's for both, so let's take a deeper look in this Bull of the Day article.

Description

The Container Store Group, Inc. engages in the retailing of storage and organization products and solutions in the United States. The company operates in two segments, The Container Store and Elfa. Its retail stores provide various lifestyle products, including closets, collections, and hooks, as well as bath, kitchen, laundry, gift packaging, long-term storage, office, shelving, storage, trash, travel, and elfa branded products. The company also designs, manufactures, and sells component-based shelving and drawer systems that are customizable for any area of the home, such as closets, kitchens, offices, and garages, as well as made-to-measure sliding doors. As of March 31, 2018, it operated 90 stores. The company also offers its products directly to customers through its Website and call center, as well as sells to various retailers and distributors, and on a wholesale basis. The Container Store Group, Inc. was founded in 1978 and is headquartered in Coppell, Texas.

Earnings History

I see an OK earnings history with two beat and two misses over the last four quarters.  In the end, the beats were not as big as the misses… but on the whole, the company is profitable.

Estimate Revisions

The recent revision have been positive, with the FY 2020 now looking at $0.49 which is up from $0.44.  The next year’s number is at $0.51, which is also up five cents over the last 30 days.

Valuation

I really like the valuation here, with the 14x forward PE and 16x trailing number.  The topline growth is just around double digits.  The price to book multiple of 1.3x is very low, but so is the 0.4x price to sales multiple.  I see margins are improving so the valuation is a good one.

Chart

Container Store (The) Price and Consensus

Container Store (The) Price and Consensus

Container Store (The) price-consensus-chart | Container Store (The) Quote

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