The Real Story: P.F. Chang's Is Overdone
P.F. Chang's China Bistro (PFCB:Nasdaq) is about as successful as a restaurant chain can be. Walk into your local P.F. Chang's at dinner time without a reservation and you'll likely go hungry for a while. However, loving a company and its stock do not have to go together like beef and broccoli.
The Consensus Story: P.F. Chang's remains a delicious growth idea. The company's casual Pei Wei concept will be the driver as new locations pop up all over the country. Earnings per share are expected to increase by only 9% in 2005, due to delays in construction of new stores. However, the consensus estimate for 2006 shows EPS growing 21% to $1.68, entitling the stock to a multiple in the low-to-mid $30s.
The Real Story: P.F. Chang's is operating on all cylinders and it will be quite difficult to surprise to the upside. In fact, there is a substantial risk that the company disappoints. Traffic growth is expected to be flat this year. The Street still views the stock as a go-go growth story, despite the fact that the days of 30%-plus annual earnings growth are over. Should the company fail to meet earnings expectations in 2006, aggressive investors could bail and the stock won't be rescued until the growth-at-a-reasonable-price investors step in
External Source - For the complete article click here
Source - TheStreet.com
The Real Story: P.F. Chang's is operating on all cylinders and it will be quite difficult to surprise to the upside. In fact, there is a substantial risk that the company disappoints. Traffic growth is expected to be flat this year. The Street still views the stock as a go-go growth story, despite the fact that the days of 30%-plus annual earnings growth are over. Should the company fail to meet earnings expectations in 2006, aggressive investors could bail and the stock won't be rescued until the growth-at-a-reasonable-price investors step in
External Source - For the complete article click here
Source - TheStreet.com
