Green Mountain Coffee Roasters, Inc. (GMCR) is trading like a rock star, gapping higher once again after reporting strong Q2 results that handily beat expectations. With four consecutive earnings surprises and a bullish 23% growth projection, this Zacks #1 rank stock is all hopped up on momentum.
Green Mountain Coffee Roasters, Inc. operates as a specialty coffee company in the US and internationally. The company was founded in 1981 and has a market cap of $10.75 million.
With earnings season in full force, we just got an update on Green Mountain’s business after the company reported excellent Q2 results that came in well ahead of expectations.
Revenue for the period more than doubled from last year, coming in at $648 million. Earnings also came in strong at 48 cents, 26% ahead of the Zacks Consensus Estimate, where the company now has an average earnings surprise of 12% over the last four quarters.
The awesome quarter was driven by continued strength in its K-Cup, the single cup of coffee brewing packet, where sales increased 94% from last year to $412 million.
Its Keurig brewer, used to brew the individual coffee packets, saw sales increase 86% to $116 million.
But anyone interested in GMCR needs to understand that the company currently has a patent on its K-Cups that is scheduled to expire next year.
But in order to stay aggressive and grow its business, GMCR’s balance sheet has swollen, with total debt skyrocketing by $989 million to $1.059 billion against cash and short-term investments $64 million.
We’ve already seen some solid movement in estimates off the good quarter, with the current year adding 25 cents to $1.47 while the next-year estimate tacked on 4 cents to $1.81, a bullish 23% growth projection.
As a momentum high flyer, the valuation pictures looks a bit hot, with a forward P/E of 52X, a sharp premium to its peers and the overall market.
On the chart, GMCR jumped higher on the good quarter into a new all-time high. The valuation is hot right here, but so are shares. Take a look below.