Lumber Liquidators Holdings (LL) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.
The upward trend in estimate revisions for this hardwood floors retailer reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
For Lumber Liquidators, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year.
The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:
12 Month EPS
Current-Quarter Estimate Revisions
For the current quarter, the company is expected to earn $0.24 per share, which is a change of +200% from the year-ago reported number.
Over the last 30 days, the Zacks Consensus Estimate for Lumber Liquidators has increased 464.71% because three estimates have moved higher compared to no negative revisions.
Current-Year Estimate Revisions
For the full year, the company is expected to earn $1.08 per share, representing a year-over-year change of +86.21%.
In terms of estimate revisions, the trend for the current year also appears quite encouraging for Lumber Liquidators. Over the past month, three estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 447.46%.
Favorable Zacks Rank
Thanks to promising estimate revisions, Lumber Liquidators currently carries a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
Investors have been betting on Lumber Liquidators because of its solid estimate revisions, as evident from the stock's 8% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.
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Lumber Liquidators Holdings, Inc (LL) : Free Stock Analysis Report
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