Cardtronics - Aggressive Growth

Cardtronics (CATM) continues to beat expectations, setting a new high on the most recent earnings surprise.

Company Description

Cardtronics operates over 30,000 ATMs in the U.S., Puerto Rico, the U.K. and Mexico. Additionally, the company works with merchants like 7-Eleven, Costco, CVS, and other major retailers and gas stations.

Another Surprise

Last time I visited Cartronics, back in March, they were coming off an earnings surprise. Well, that momentum carried into the second quarter, which they reported on Aug 4.

Revenues increased 7% year over year to $133 million. Gross margin also improved, up 240 bps to 32.5%. These 2 factors lead to a 53% jump in EPS, to 26 cents. Analysts were looking for 19 cents, giving Cardtronics its fifth earnings surprise in the past 6 quarters.

Additionally, management said they are confident about the new services Cardtronics offers and its future impact on the company's growth.

Estimates Up

Since the earnings release, the Zacks Consensus Estimate for 2010 is up a dime, to 84 cents. Next year's forecasts are up 15 cents on average, to $1.07.

If Cardtronics meets these expectations, annual growth rates will be 53% this year and another 27% in 2011.

The Chart

Shares of CATM set a new 52-week high on the news and then topped that level on the recent market strength. The stock continues to butt up against this level, but if we continue to see estimates rise, there should be a new high soon after.

Read the March 3rd Feature Here

Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service

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