While many small caps have been hit hard in the recent slump, this trend hasn’t afflicted all of the companies in this capitalization level. Take for example Jamba (JMBA – Snapshot Report), a company best known for its subsidiary, Jamba Juice, which offers blended drinks and smoothies across the U.S.
While it has seen a brief dip in recent trading, the company has easily outperformed the Russell 2000 over the past six months. In fact, JMBA has added about 13.6% in the time frame, compared to a loss of 4.9% for the Russell 2000 ETF (IWM) in the same period.
Obviously, this represents a large level of outperformance when compared to peers in the small cap world, and especially so when considering how weak many other stocks have been over the past few months. However, when considering the recent earnings report, it is pretty clear why JMBA is outperforming and how it could continue to move higher in the quarters ahead too.
In the August earnings report, JMBA reported earnings of 44 cents a share, a big beat from analyst expectations which called for EPS of 38 cents for the quarter. Additionally, it marked a return to profitability for JMBA as last quarter saw a loss of one cent a share so this represented a very much needed surprise for the company.
Additionally, a highlight from the report was the firm’s new products which are helping to drive sales growth. Many now believe that the company’s turnaround plan is working and that more growth could be ahead for JMBA in the future.
Analysts seem to agree with these bullish prospects as earnings estimates have been moving higher lately for JMBA, signaling bullish prospects for the company’s EPS. In fact, not a single estimate has gone lower in our consensus for either the current year or next year time frames.
Additionally, the magnitude of these revisions have been pretty solid, and for both the current year and next year time frames as well here. For the current year, the consensus has moved from $0.37/share 60 days ago to $0.43/share today, while next year’s figures have seen numbers move from $0.71/share to $0.80/share in the same time period.
With these moves higher, JMBA is now looking to post truly amazing growth rates for the current year time frame, with current projections putting the number at nearly 378%. And, for next year, growth is expected to be at 86% right now, so clearly JMBA has plenty of room to move higher in the months and years ahead from an earnings growth perspective.
Thanks to these factors, Jamba Juice has earned itself a Zacks Rank #1 (Strong Buy) putting it into rare company. Only 5% of all stocks in our coverage universe are Strong Buy stocks, so clearly JMBA is looking quite impressive right now, and especially when compared to other small caps out there.
Plus, JMBA has a very strong growth rate and with new products and plenty of options for growth still on the table, these triple digit growth rates should definitely be within reach for the company. So if you are looking for a strong company in the almost universally beaten down small cap space, definitely consider JMBA as a standout that could juice your portfolio’s returns in Q4.
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