| Stock (Symbol) | Stock Price | |
CaesarStone (CSTE) |
$63 |
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| Data is as of | Expected to Report | Sector |
February 25, 2015 |
May 6 – May 11 |
Retail & Travel |
| Sharek’s Take | ||
| CaesarStone (CSTE), a quartz counter top manufacturer, lowered revenue guidance after it reported last qtr’s earnings, and now profit growth is expected to be just 3% this year on a 14% rise in sales. The stock sold off a bit after the bad news, but has now recovered. Still, at 26x earnings this $63 stock has a Fair Value of $58 for 2015. One good thing is the company is finishing completion of a new $115 million plant in Georgia and 1st line should be operational in Q2 with another line going by Q4 — and CSTE has Ikea selling its product to create demand for the extra supply. I’m guessing sales will come in higher than expectations, but still the profit growth of 3% for this year isn’t much. I’ll hold on to CSTE for now but may sell some shares in client accounts, as I feel 2016 will be a good year but we might have to sit on this stock until then. | ||
| Just One-Year Chart | ||
 The Estimates don’t look good, and CSTE didn’t beat the street last qtr, it just met estimates. The 26 P/E is just what I thought the stock would should for when I wrote this research report last qtr but now 2015’s profit estimate has dropped from $2.81 to $2.40. |
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| Earnings Table | ||
 Sales growth was just 17% last qtr down from 31% two qtrs ago. Profit growth clocked in at a respectable 20%.
CSTE merely met estimates after crushing them by 15 cents the qtr before. |
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| Fair Value | ||
 I reduced my Fair Value P/E slightly from 26 to 24 as the company still has a bright future despite the reduced outlook. But now I think the stock could be around this price all year. |
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| Ten-Year Chart | ||
 Very nice ten-year chart so far outside the 3% profit growth expected this year. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
20 of 24 |
CaesarStone just lowered estimates and at 26 times earnings I didn’t think the stock can move much higher this year. The new plant opening gives me hope for the future, otherwise I would be selling the stock. Still, I’ll reduce my position some because I think I can put the money to better use. |
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Aggressive Growth Portfolio
N/A |
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