Stock Buy: Monro Muffler Brake, Inc.

Monro Muffler Brake, Inc. (MNRO: 34.33 -0.14 -0.41%) just hit a new 52-week high after reporting strong Q3 results that included 29% revenue growth and a 9% earnings beat as consumers continue to opt for upgrades instead of buying new.

Third-Quarter Results

Sales for the quarter were up 29% from last year to a record $152.7 million. Earnings also came in strong at 38 cents per share, 3 cents ahead of the Zacks Consensus Estimate. Monro has been a steady producer over the last year, beating the consensus in each of the last four quarters by an average of 2 cents, or 5%.

Gross margin and operating expenses were mostly steady over the quarter, but Monroe did note that it added 42 stores for a total of 780 locations.

Estimates

Estimates nudged higher on the good quarter, with the current year adding 6 cents to $1.55. The next-year estimate is up 6 cents to $1.87, a 21% growth projection.

Valuation

Shares of MNRO still look reasonably priced based on the optimism and solid growth projection, trading with a forward P/E of 20X.

The Chart

MNRO recently hit a new 52-week high at $35.10. If shares pull back look for support from the long-term trend line. Take a look below.

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