The San Diego-based restaurant chain shows strength in both of its brands, analysts said.
"We have been impressed by the team's ability to manage cost headwinds and drive margin gains," analysts noted.
"F1Q & 2015 guides are solid, with much stronger than expected Qdoba same-store sales (SSS) as the new menu implementation is driving double digit SSS so far in F1Q. We'd be buyers of the stock as we see above-trend SSS and earnings per share growth continuing and a valuation that has room to expand," analysts added.
Shares of Jack in the Box closed up 4.78% at $74.92 yesterday.
Separately, TheStreet Ratings team rates JACK IN THE BOX INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate JACK IN THE BOX INC (JACK) a BUY. This is driven by a few notable strengths, 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 revenue growth, solid stock price performance, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 9.5%. Since the same quarter one year prior, revenues slightly increased by 2.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, JACK's share price has jumped by 60.24%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, JACK should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Net operating cash flow has significantly increased by 175.76% to $87.10 million when compared to the same quarter last year. In addition, JACK IN THE BOX INC has also vastly surpassed the industry average cash flow growth rate of -17.66%.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, JACK IN THE BOX INC has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
- JACK IN THE BOX INC's earnings per share declined by 18.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, JACK IN THE BOX INC increased its bottom line by earning $2.26 versus $1.84 in the prior year. This year, the market expects an improvement in earnings ($2.80 versus $2.26).
- You can view the full analysis from the report here: JACK Ratings Report