inTest Corp (NYSE:INTT) continues impressing investors with its innovative products and business expansion strategies. The company has generated solid earnings in the last 32 consecutive quarters. Moreover, the company’s strategy of expanding its market share with acquisitions and innovations is working.
In the latest quarter, inTest’s revenue increased 60% over the past year quarter, supported by its Ambrell acquisition. Ambrell’s heating technologies have substantially expanded its position in industrial markets that are growing at a rapid pace. Aside from industrial markets, the demand for heating technologies is thriving across emerging, fiber-optic, consumer product packaging, automotive, and other markets.
Investors are cheering inTest’s business strategies. The company’s stock price surged 82% in the last twelve months, rallying more than 200% in the last five years.
The inTest CEO said, “There is a natural ebb and flow to the test industry, while the semiconductor market continues to be very healthy, with fab spending for 2017 and 2018 expected to be at historic levels.”
The company has also been successfully turning solid revenue growth into big profits. inTest Corp generated quarterly earnings of $0.19 per share in the latest quarter, compared to $0.11 per share in the same period last year.
inTest Corp shares are currently trading around $9. However, trading close to $9 a share, INTT stock appears undervalued considering its valuations and future fundamentals. At present, its price to earnings ratio is hovering around only 13 times to earnings, compared to the industry average of 26 times. The stock also looks undervalued trading at 1.5 times to sales, down significantly from the industry average of 4.7 times.
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On the other hand, the company expects a high double-digit revenue and earnings growth next year, supported by its expansion in testing and semiconductor markets. With the positive free cash flows and cash equivalent of $11.5 million, inTest Corp has significant potential to invest in growth opportunities. The demand from its end-markets has also been thriving over the last year, evident by a growth of 56% in its bookings in the latest quarter. Overall, this stock has the potential to offer substantial returns in 2018.
Featured Image: Depositphotos/© Violka08
