The firm said it believes Buffalo Wild Wings has the opportunity to see long term growth heading into 2015.
"Buffalo Wild Wings is our best pick in the restaurant industry heading into 2015, as we believe its long term growth opportunity, investment in technology, and current valuation compares favorably to its peer group," Stern Agee said.
For the 2014 fiscal year Stern Agee estimates that Buffalo Wild Wings will report earnings of $4.96 per share. For fiscal 2015 the firm estimates earnings of $6.02 per share.
Shares of Buffalo Wild Wings are up 0.64% to $174.50 in pre-market trading today.
Separately, TheStreet Ratings team rates BUFFALO WILD WINGS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate BUFFALO WILD WINGS INC (BWLD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 9.3%. Since the same quarter one year prior, revenues rose by 18.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- BUFFALO WILD WINGS INC has improved earnings per share by 20.0% 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, BUFFALO WILD WINGS INC increased its bottom line by earning $3.80 versus $3.06 in the prior year. This year, the market expects an improvement in earnings ($4.96 versus $3.80).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Hotels, Restaurants & Leisure industry average. The net income increased by 21.7% when compared to the same quarter one year prior, going from $17.87 million to $21.75 million.
- BWLD has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.84 is somewhat weak and could be cause for future problems.
- You can view the full analysis from the report here: BWLD Ratings Report