Roth Capital Raises Zumiez Price Target On The Heels Of Strong 3Q14 Results


In a research report released this morning, Roth Capital analyst Dave King reiterated a Buy rating on Zumiez (NASDAQ:ZUMZ) and slightly raised his price target to $39 (from $37), as the company’s third-quarter results¬†exceeded estimates on higher-than-expected gross margin and
lower expenses, while 4Q14 guidance fell a bit short of consensus.

King noted, “Zumiez appears to be still gaining market share in what we believe is an improving teen retail environment. We continue to like ZUMZ for its differentiated business model, consistent strategy, strong free cash flow, proven management, and underappreciated international growth opportunity.”

The analyst added, “We are increasing our price target from $37 to $39, which now assumes a roughly 20x multiple (up from 19x) on our new FY15 EPS estimate of $1.75, plus ~$3.75 in net cash. This multiple is still derived using a midteens underlying growth rate and a 1.00x-1.25x PEG ratio.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Dave King has a total average return of -0.7% and a 58.0% success rate. King has a 13.3% average return when recommending ZUMZ, and is ranked #2585 out of 3395 analysts.

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