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Why Lumber Liquidators (LL) Is Up Today

NEW YORK (TheStreet) -- Lumber Liquidators (LL) was gaining 7.2% to $102.50 Wednesday after reporting fourth-quarter earnings and revenue that beat analysts' estimates.

For the fourth quarter Lumber Liquidators reported revenue of 74 cents a share, beating analysts' estimates of 72 cents a share by 2 cents. Revenue rose 22.7% in the quarter to $258.4 million. Analysts expected revenue of $255.48 million for the quarter.

Looking to full-year 2014 the company expects earnings between $3.25 and $3.60 a share and revenue between $1.15 billion and $1.2 billion. Analysts expect earnings of $2.53 and revenue of $1.18 billion for the year.

Lumber Liquidators also said its board of directors has authorized the repurchase of $50 million of its common stock.

Must read: Three Small-Cap Earnings Plays

TheStreet Ratings team rates LUMBER LIQUIDATORS HLDGS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate LUMBER LIQUIDATORS HLDGS INC (LL) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 6.8%. Since the same quarter one year prior, revenues rose by 24.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • LUMBER LIQUIDATORS HLDGS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, LUMBER LIQUIDATORS HLDGS INC increased its bottom line by earning $1.68 versus $0.93 in the prior year. This year, the market expects an improvement in earnings ($2.75 versus $1.68).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 58.3% when compared to the same quarter one year prior, rising from $12.88 million to $20.40 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Specialty Retail industry and the overall market, LUMBER LIQUIDATORS HLDGS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • 41.83% is the gross profit margin for LUMBER LIQUIDATORS HLDGS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.02% is above that of the industry average.
  • You can view the full analysis from the report here: LL Ratings Report

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