Medical Transcription Services Stock Buy
Transcend Services Ticker TRCR just topped analyst expectations yesterday and shares are on the rise. Even though estimates haven’t started coming in yet, the stocks still has great growth rates and valuations. And, it should only get better for this Zacks #1 Rank (Strong Buy).
Company Description
Transcend Services, Inc. provides medical transcription services to the healthcare industry in the United States. It converts physicians voice recordings into electronic medical record documents using its proprietary BeyondTXT workflow platform that provides workflow management and production control. The company utilizes a combination of its proprietary Internet-based voice and data distribution technology, customer based technology, and home-based medical language specialists to convert physicians voice recordings into electronic documents. It also offers its medical transcription services directly on the customers platforms. The company serves hospitals and clinics. Transcend Services was founded in 1976 and is based in Atlanta, Georgia.
Just Surprised
Transcend just beat earnings expectations on May 5 when they reported earning per share of $0.34 compared to the Zacks Consensus Estimates of $0.28. This gives the company back to back earnings surprises. Revenue was up 32% to $29.3 million, on a year over year basis, driven by surging volumes. Transcend said it ‘dramatically exceeded’ its own outlook.
Bullish Estimates
Because the surprise was just yesterday, we do not have any new estimates just yet, but forecasts were rising into the number. When you see projections rising into the number, that number topped and then shares move higher; it is extremely likely that analysts will raise their outlooks.
Right now, the Zacks Consensus Estimate is at $1.21 and next year’s is at $1.39. Given the $0.87 Transcend earned in 2010, expected growth rates are currently 39% and 16%, respectively, and that should be on the rise very soon.
Valuations
The forward P/E is nearing 20 times but, again, that is ahead of upward estimate revisions. Also, even with that P/E we are stil getting a PEG ratio of 1.0, which is a bargain.
The Chart
A few years ago the outlook for Transcend’s earnings were rocky, to say the least. But look just how much they have righted the ship in the last year or 2. Big year over year growth and sizable revisions throughout the years.
This Week’s Aggressive Growth Zacks Rank Buy Stocks
W. R. Grace & Co. NYSE: GRA. Analysts are pleased with the recent earnings surprise. Estimates are moving much higher giving shares excellent growth rates, as well a attractive valuations. This Zacks #1 Rank (Strong Buy) is also set to emerge from Chapter 11 later this year.
Federal-Mogul Corp. NasdaqGS: FDML. Federal-Mogul has pushed through a point of resistance thanks to a recent earnings report. The company, once again, topped expectations and analysts are raising estimates. Shares are up to Zacks #1 Rank (Strong Buy) and also trade with solid valuations.
CAI International, Inc. NYSE: CAP. Analysts raised their expectations once the company reported an 82% jump in revenues last week. Shares of this Zacks #1 Rank (Strong Buy) are trading with solid valuations to go along with the impressive growth rates.
Buffalo Wild Wings, Inc. NasdaqGS: BWLD. Buffalo Wild Wings is coming off of a surprisingly strong quarter. Earnings beat expectations and the company will continue is aggressive expansion. This Zacks #1 Rank (Strong Buy) has analysts raising their outlooks on positive guidance from the company.
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