Will Buffalo Wild Wings Continue To Expand Across The Country?

Feb. 4.14 | About: Buffalo Wild (BWLD)

Buffalo Wild Wings Inc. (NASDAQ:BWLD) is set to report FQ4 2013 earnings after the market closes on Tuesday, February 4th. Buffalo Wild Wings is a casual restaurant and sports bar chain that features some of sports fans' favorite things; lots of big TVs, buffalo wings, and beer. Over the previous 2 quarters, BWLD has beaten Wall Street expectations and has been expanding. Last quarter, BWLD reported a 28% year over year revenue increase and this quarter analysts are expecting almost 20% yoy growth. Buffalo Wild Wings has just shy of 1000 stores across the country and with increasing profitability, they will likely look to expand in 2014. Here's what investors expect Buffalo Wild Wings to report Tuesday.

The information below is derived from data submitted to the Estimize.com platform by a set of Buy Side and Independent analyst contributors.

(Click Here to see All Estimates for BWLD)

The current Wall Street consensus expectation is for BWLD to report $1.06 EPS and $345.19M revenue while the current Estimize.com consensus from 17 Buy Side and Independent contributing analysts is $1.08 EPS and $346.01M revenue. This quarter, the buy-side as represented by the Estimize.com community is expecting BWLD to beat the Street's expectations for profit while reporting in-line with the revenue forecast.

By tapping into a wider range of contributors including hedge-fund analysts, asset managers, independent research shops, students, and non professional investors, Estimize has created a data set that is up to 69.5% more accurate than Wall Street, but more importantly it does a better job of representing the market's actual expectations. It has been confirmed by an independent academic study from Rice University that stock prices tend to react with a more strongly associated degree to the expectation benchmark from Estimize than from the Wall Street consensus.

The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case, we are seeing a small differential compared to recent quarters.

The distribution of estimates published by analysts on the Estimize.com platform range from $1.04 to $1.11 EPS and $344.00M to $354.12M in revenues. This quarter, we're seeing a smaller distribution of estimates on profit compared to previous quarters.

The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A narrower distribution of estimates signaling more agreement in the market, which could mean less volatility post earnings.

Throughout the quarter, the EPS estimate from Wall Street increased from $1.03 to $1.06c while the Estimize consensus dropped from $1.10 to $1.08. Both groups have increased their revenue expectations by a small margin throughout the period. Wall Street raised its revenue consensus from $344.6M to $345.19M while the consensus from the Estimize community inched up from $345.56M to $346.01M. Timeliness is correlated with accuracy and rising analyst revisions are often a bullish indicator.

The analyst with the highest estimate confidence rating this quarter is j_holliman who projects $1.07 EPS and $346.00M in revenue. In the Winter 2014 season, j_holliman rated as the 22nd best analyst and is ranked 7th overall among over 3,700 contributing analysts. Estimate confidence ratings are calculated through algorithms developed by deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case, j_holliman agrees with the Estimize community that BWLD will beat the Street's expectations by a narrow margin.

This quarter analysts are expecting another period of growth from Buffalo Wild Wings. If BWLD can keep up with analyst expectations on Tuesday, we could see the company continue to spread across the country and increasingly become a household name.

Disclosure: No positions