While the recent slump has hit many small-cap stocks hard, it hasn’t afflicted all of the companies in this capitalization level. Take for example Jamba (JMBA). Jamba is best known for its subsidiary Jamba Juice, which offers blended drinks and smoothies across the U.S.
While Jamba has seen a brief dip in recent trading, JMBA 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 iShares Russell 2000 Index ETF(IWM) in the same period.
Obviously, the chart above represents a large level of outperformance when compared to peers in the small cap world, especially considering how weak many other stocks have been in recent months. However, the recent earnings report makes clear why JMBA is outperforming and how it could continue to move higher in the quarters ahead.
Recent Earnings
In the August earnings report, JMBA reported earnings of 44 cents per share — a big beat from analyst expectations, which called for earnings-per-share of 38 cents for the quarter.
The August report marked a return to profitability for JMBA as the previous quarter saw a loss of 1 cent per share. So, Jamba’s earnings surprise was much needed.
Additionally, Jamba’s new products, which are helping to drive sales growth, were highlights in the latest earnings report. Many now believe that Jamba’s plan is working and that more growth could be ahead for JMBA.
Earnings Estimates
Analysts seem to agree with these bullish prospects as earnings estimates have been moving higher lately for JMBA, signaling bullish prospects for Jamba’s EPS. In fact, not a single estimate has gone lower in our consensus for JMBA in either the current year or next year.
Additionally, the magnitude of these revisions have been pretty solid for both the current year and next year. For the current year, the consensus has moved from 37 cents per share 60 days ago to 43 cents per share today. Next year’s figures have seen numbers move from 71 cents per share to 80 cents per 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 projections putting the number at nearly 378%. For next year, JMBA growth is expected to be at 86% right now.
Clearly, JMBA has plenty of room to move higher in the months and years ahead from an earnings growth perspective.
Bottom Line
Thanks to sales and earnings growth, Jamba Juice has earned itself a “Zacks Rank #1 (strong buy).” Only 5% of all stocks in our coverage universe are “strong buy” stocks. Obviously, JMBA is looking quite impressive right now, especially when compared to other small-cap stocks 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 Jamba. 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.
More From InvestorPlace
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