3 Cheap Stocks To Buy In Q3 For Big Upside

The company blew away our Q1 EPS estimates and it’s ready to return to growth as consumers pour into restaurants ready to spend. Zacks estimates call for RUTH to post 50% revenue growth in FY21 and another 13% in FY22 to climb above its pre-pandemic levels at $472 million. It is also projected to swing from an adjusted loss of -$0.38 a share to +$1.07 a share and then expand its bottom line by another 33% in 2022.

Zacks Investment Research

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RUTH’s earnings estimates have popped recently to help it hold its Zacks Rank #1 (Strong Buy) standing. The stock also rocks a “B” grade for Growth and Momentum in our Style Scores system.

Like CONN and much of the market, Ruth’s stock popped Tuesday, and at around $20 a share it still has 25% more runway before it reaches its May highs. And it sits 35% below its 2018 levels while marking an 80% discount to its industry at 15.1X forward earnings.

Ruth’s shares slipped below key technical levels as they pulled back from their May levels. Luckily the recent pop has put it right on the cusp of its 200-day moving average.

The stock also just broke above-oversold RSI (30) levels at around 34. All of this provides plenty of room for Ruth’s to climb, especially as consumers continue returning to their normal lives.

Mattel, Inc. (MAT Quick Quote MAT - Free Report)

Prior Close: $19.52 USD (close of regular trading Tuesday, July 20)

Mattel is a historic toys and games maker with a portfolio that includes Barbie, Hot Wheels, Fisher-Price, and much more. The company is coming off a strong second-half of 2020 that saw it post back-to-back quarters of 10% sales growth. This expansion marked its strongest in years, as traditional toy and game companies struggle to adapt to the tech-heavy world of video games and smartphones.

Mattel executives said they are seeing higher-than-expected demand because people are trying to find different ways to entertain their kids and families amid growing concerns about screen time that was elevated during remote learning. MAT’s sales climbed 2% last year amid the pandemic to post its first top-line growth in six years.

MAT then destroyed our Q1 FY21 estimates, with sales up 47%. Zacks estimates project Mattel’s FY21 revenue will jump 9% to reach $4.98 billion, with FY22 projected to come in 4.6% higher. Better yet, Mattel’s adjusted earnings are projected to climb by 69% and 28%, respectively. The company has also crushed our bottom-line estimates by an average of 80% in the trailing four periods.

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