Outdoor Channel Holdings, Inc.
) reported a 100% positive earnings surprise in its second quarter
of 2012. Currently, this Zacks #1 Rank (Strong Buy) entertainment
and media stock is hovering close to its 52-week high of $7.99.
Break-even Q2 Result
On August 7, Outdoor Channel Holdings reported break-even second
quarter earnings per share, which compared favorably with a loss of
3 cents in the prior-year quarter and with the Zacks Consensus
Estimate for a loss of 5 cents. Top-line growth and operational
efficiencies across business segments led to the encouraging
Total revenue of $16.3 million surpassed the Zacks Consensus
Estimate of $15 million and rose 12% year-over-year, mirroring
revenue increases in segments such as The Outdoor Channel (up
14.7%) and Aerial Cameras (up 5%). However, revenue at the
Production Services unit dropped 11.6%. Loss from operations
improved to $89,000 from $1.6 million in the year-ago quarter.
Earnings Momentum Climbing
The Zacks Consensus Estimate for 2012 rose 30% to 13 cents per
share over the last 60 days, implying year-over-year growth of
85.7%. For 2013, the Zacks Consensus Estimate is 18 cents per
share, increasing approximately 12.5% over the same time frame and
marking year-over-year growth of 38.5%.
Outdoor Channel Holdings currently trades at a forward P/E of
55.69x, reflecting a 63.6% premium to the peer group average of
34.04x. Also, on a price-to-book basis, shares trade at 1.40x, a
23.9% premium to the peer group average of 1.13x. Again its
price-to-sales ratio of 2.56 is at a substantial premium to the
peer group average of 0.58.
A Look at the Chart
The 12-month EPS chart below indicates that after witnessing
volatility in the past, the stock price has now started to
correlate with the increasing trend in estimates. The current
momentum appears to be driven by better-than-expected
second-quarter 2012 results. Currently, the stock price is in the
range of $7.00-$7.50, and the consensus estimates for 2012 and 2013
are steadily moving upward.
Founded in 1984 and headquartered in Temecula, California, Outdoor
Channel Holdings, Inc. is an entertainment and media company in the
United States, and reports under three segments: The Outdoor
Channel, Production Services and Aerial Cameras. The Outdoor
Channel division operates Outdoor Channel and outdoorchannel.com,
and offers programming on different traditional outdoor activities,
such as hunting, fishing, shooting sports, off-road motorsports and
others. The Production Services unit is primarily involved in the
production, development and marketing of sports programming. The
Aerial Cameras division offers suspended aerial camera services to
media networks. Outdoor Channel Holdings, which competes with
Discovery Communications, Inc. (
), currently has a market cap of $182.3 million.
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