We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Bull of the Day: Build-A-Bear Workshop, Inc. (BBW)
Read MoreHide Full Article
Build-A-Bear Workshop (BBW - Free Report) , a Zacks Rank #1 (Strong Buy), has broken out of a long base in a powerful move to the upside amid the recent equity rally. Simply put, not many stocks finished 2022 in positive territory, let alone witness a surge to multi-year highs. The bullish price action is a sign of strength as BBW looks to continue its momentum into the new year.
BBW sports the highest Zacks Value Style Score of ‘A’, indicating an increased likelihood that the stock propels higher on favorable valuation metrics. The company is part of the Zacks Retail – Miscellaneous industry group, which ranks in the top 24% out of approximately 250 Zacks Ranked Industries. Because this industry is ranked in the top half of all Zacks Ranked Industries, we expect it to outperform the market over the next 3 to 6 months, just as it has over the preceding 3-month period:
Image Source: Zacks Investment Research
Also note the relative undervaluation for this industry below:
Image Source: Zacks Investment Research
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1. It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Company Description
Build-A-Bear Workshop operates as a multi-channel retailer of plush animals and related products. The company offers various styles of plush products that are pre-stuffed or to-be-stuffed, along with sounds and scents that can be added to the stuffed animals. In addition, BBW provides a range of clothing, shoes, accessories, and other toy and novelty items.
BBW conducts its stores under the Build-A-Bear Workshop brand name and sells its products through several e-commerce sites. The company operates more than 300 stores in the United States and Canada; 41 stores in the United Kingdom and Ireland; and 72 franchised stores internationally.
Earnings Trends and Future Estimates
BBW has built up an impressive earnings history, surpassing earnings estimates three of the past four quarters. Back in November of last year, the company reported Q3 EPS of $0.51/share, a 34.21% surprise over the $0.38 consensus estimate. BBW has delivered a trailing four-quarter average earnings surprise of 14.73%.
Growth for the retailer is expected to remain hot in the coming quarters. For the current quarter, the Q1 Zacks Consensus Estimate stands at $1.02/share, reflecting growth of 14.61% relative to the same quarter last year.
Analysts covering BBW have increased their full-year EPS estimates by +10.31% in the past 60 days. The fiscal 2024 Zacks Consensus EPS Estimate now stands at $3.21/share, translating to potential growth of 11.46% relative to last year. Sales are anticipated to climb 5.47% to $485.6 million.
Image Source: Zacks Investment Research
Let’s Get Technical
Since bottoming out back in September of last year, BBW shares have advanced over 90% and are showing no signs of slowing down. Only stocks that are in extremely powerful uptrends are able to make this type of price move and widely outperform the major indices. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
Image Source: StockCharts
Notice how both the 50-day and 200-day moving averages (blue and red lines, respectively) are sloping up. The stock has been making a series of higher highs, and the recent pullback represents a solid buying opportunity. With both strong fundamentals and technicals, BBW is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Build-A-Bear Workshop has recently witnessed positive revisions. As long as this trend remains intact (and BBW continues to deliver earnings beats), the stock will likely continue its bullish run this year.
Bottom Line
At just an 8.45 forward P/E, BBW shares remain relatively undervalued and represent a phenomenal opportunity. Solid institutional buying should continue to provide a tailwind for the stock price. Robust fundamentals combined with a strong technical trend certainly justify adding shares to the mix.
Backed by a leading industry group and robust history of earnings beats, it’s not difficult to see why this company is a compelling investment. This stock market winner continues to prove its doubters wrong, and investors would be wise to consider BBW as a portfolio candidate if they haven’t already done so.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Bull of the Day: Build-A-Bear Workshop, Inc. (BBW)
Build-A-Bear Workshop (BBW - Free Report) , a Zacks Rank #1 (Strong Buy), has broken out of a long base in a powerful move to the upside amid the recent equity rally. Simply put, not many stocks finished 2022 in positive territory, let alone witness a surge to multi-year highs. The bullish price action is a sign of strength as BBW looks to continue its momentum into the new year.
BBW sports the highest Zacks Value Style Score of ‘A’, indicating an increased likelihood that the stock propels higher on favorable valuation metrics. The company is part of the Zacks Retail – Miscellaneous industry group, which ranks in the top 24% out of approximately 250 Zacks Ranked Industries. Because this industry is ranked in the top half of all Zacks Ranked Industries, we expect it to outperform the market over the next 3 to 6 months, just as it has over the preceding 3-month period:
Image Source: Zacks Investment Research
Also note the relative undervaluation for this industry below:
Image Source: Zacks Investment Research
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1. It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Company Description
Build-A-Bear Workshop operates as a multi-channel retailer of plush animals and related products. The company offers various styles of plush products that are pre-stuffed or to-be-stuffed, along with sounds and scents that can be added to the stuffed animals. In addition, BBW provides a range of clothing, shoes, accessories, and other toy and novelty items.
BBW conducts its stores under the Build-A-Bear Workshop brand name and sells its products through several e-commerce sites. The company operates more than 300 stores in the United States and Canada; 41 stores in the United Kingdom and Ireland; and 72 franchised stores internationally.
Earnings Trends and Future Estimates
BBW has built up an impressive earnings history, surpassing earnings estimates three of the past four quarters. Back in November of last year, the company reported Q3 EPS of $0.51/share, a 34.21% surprise over the $0.38 consensus estimate. BBW has delivered a trailing four-quarter average earnings surprise of 14.73%.
Growth for the retailer is expected to remain hot in the coming quarters. For the current quarter, the Q1 Zacks Consensus Estimate stands at $1.02/share, reflecting growth of 14.61% relative to the same quarter last year.
Analysts covering BBW have increased their full-year EPS estimates by +10.31% in the past 60 days. The fiscal 2024 Zacks Consensus EPS Estimate now stands at $3.21/share, translating to potential growth of 11.46% relative to last year. Sales are anticipated to climb 5.47% to $485.6 million.
Image Source: Zacks Investment Research
Let’s Get Technical
Since bottoming out back in September of last year, BBW shares have advanced over 90% and are showing no signs of slowing down. Only stocks that are in extremely powerful uptrends are able to make this type of price move and widely outperform the major indices. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
Image Source: StockCharts
Notice how both the 50-day and 200-day moving averages (blue and red lines, respectively) are sloping up. The stock has been making a series of higher highs, and the recent pullback represents a solid buying opportunity. With both strong fundamentals and technicals, BBW is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Build-A-Bear Workshop has recently witnessed positive revisions. As long as this trend remains intact (and BBW continues to deliver earnings beats), the stock will likely continue its bullish run this year.
Bottom Line
At just an 8.45 forward P/E, BBW shares remain relatively undervalued and represent a phenomenal opportunity. Solid institutional buying should continue to provide a tailwind for the stock price. Robust fundamentals combined with a strong technical trend certainly justify adding shares to the mix.
Backed by a leading industry group and robust history of earnings beats, it’s not difficult to see why this company is a compelling investment. This stock market winner continues to prove its doubters wrong, and investors would be wise to consider BBW as a portfolio candidate if they haven’t already done so.