Why Amer Sports Stock Was Winning big This Week
Key Points
The sports equipment specialist delivered a beat-and-raise third quarter.
It scored big with otherwise cautious consumers during the period.
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This week, investors were as enthusiastic about Amer Sports (NYSE: AS) as they were about their favorite teams.
On the back of a beat-and-raise quarter reported by the company, and a clutch of subsequent price target raises from analysts, it's been riding high in recent days. Amer's share price was up by over 14% week-to-date as of early afternoon Friday, according to data compiled by S&P Global Market Intelligence.
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A real home run quarter
Amer's third-quarter earnings release was published Tuesday morning. The company reported a 30% year-over-year increase in revenue to just under $1.76 billion. Far more impressively, its net income not according to generally accepted accounting principles (GAAP) soared by 161% to $185 million, or $0.33 per share.
Image source: Getty Images.
Those numbers topped the consensus analyst estimates, which were $1.73 billion for revenue and $0.25 per share for non-GAAP (adjusted) net profit.
Although the average American consumer has become more cautious, it's clear they still want to play sports and engage in outdoor activities (both major Amer product segments). The company's wares are also a hit overseas, particularly in Asia -- sales to the Greater China region climbed 47% higher.
Raises and upgrades
In the wake of that estimates-topping report, several analysts were quick to make bullish moves on their Amer evaluations. These generally took the form of price target raises, but one researcher -- Nomura's Jizhou Dong -- went so far as to upgrade his recommendation from neutral to buy.
To me, this is entirely understandable, as is the investor bull run. It isn't easy these days to do well as a purveyor of discretionary consumer goods, and Amer has clearly found the sweet spot. I think this stock will do especially well if the economy starts to stall or wither, since demand for its products is clearly strong despite general consumer skittishness worldwide.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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