I have been eyeing this stock for quite a while but couldn’t pull the trigger to buy it due to its high valuations. It had been trading around 46-49 PE during the period that I was eyeing it. This quarter, the company released earnings and because same store sales missed estimates, the stock price proceeded to tank by about 8% within 2 straight days.
I don’t understand. The earnings still managed to grow year on year by 47% and free cash flow was up 35%, yet the market punishes the stock because it missed estimates. For the sake of new readers who have never been to this blog, this is how I feel about earnings missing estimates. The management also warned that sales growth in existing stores would slow down, which is natural in my opinion, considering that whenever you open a new store, you will probably max out ......