(CSTR) Coinstar Incorporated – Bullish Outlook

Coinstar Inc (CSTR) soared to an all-time high after the latest earnings release. revenues have dramatically increased and analysts continue to raise their estimates.

Company Description

Most of you are probably familiar with the Coinstar machines at local grocery stores. For anyone who has not seen these machines, they are about the size of an ATM and allow customers to convert accumulated change into cash or gift certificates. Coinstar then takes out a processing fee.

Additionally, the company owns the growing number of “Redbox” kiosks that offer self-service DVD rentals. Coinstar also operates other various self-service kiosks.

Another Beat

On April 29 Coinstar reported first-quarter results that showed a 47% jump in revenue, to $350 million. DVD rentals account for 75% of the companies revenues.
Net income came in at $6.4 million up from a $2.0 million loss one year ago. Earnings broke down to 21 cents a share, 8 cents better than expected. This was the fifth consecutive earnings surprise.

Bullish Outlook

While Coinstar analysts are mixed on the coming quarter, the full-year estimates are up sharply. The Zacks Consensus Estimate for 2010 is now $1.88, up from $1.59.

Next year’s projections are averaging $2.76, a 46 cent increase. If Coinstar hits these marks the growth rates will be 77% for 2010 and another 47% in 2011.

The Chart

Shares surged to all-time highs on the news. While the stock is volatile, understandably, it held up well in the midst of the strong selling that took place last week.


Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service

Zacks Investment Research

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