Can VSTO Continue Its Rapid Chart Growth?

Vista Outdoor Inc. (NYSE:VSTO) is an American sporting goods company. Vista Outdoor designs, manufactures, and markets various consumer products in the outdoor sports and recreation markets in the U.S. and internationally. The company’s portfolio boasts 40 sports and outdoors brands including Bushnell Golf, CamelBak, and Remington.

Vista Outdoor stock has been a large gainer over the last year, brushing off pandemic-related fears from investors. Over the past 12 months, Vista Outdoor stock has demonstrated explosive growth of more than 250%. Additionally, VSTO stock price has increased well over 650% since bottoming at its March record low of $4.29. Since then, VSTO stock price has continuously pushed to new highs, most recently reaching a four-year peak of $34.50 yesterday.

VSTO reported its fourth quarter of 2020 results last week, marking its fourth straight earnings beat. For the year of 2020, Vista Outdoor stock outperformed earnings expectations on all four quarters. For the first quarter of 2020, the company beat analyst expectations by a margin of $0.05 and reported earnings of $0.11 per share. For the second quarter of 2020, VSTO increased its earnings per share (EPS) to $0.51 and managed to beat expectations by a massive margin of $0.51. The company increased its EPS to $1.10 for the third quarter of 2020 and beat expectations by another significant margin of $0.46. In its most recent quarterly report, VSTO reported earnings of $1.03 per share and beat expectations by a margin of $0.38.

In general, Vista Outdoor has benefitted from people’s desire to remain active. A noted pandemic outcome has been a boost in outdoor activities, which has also resulted in some significant increases to Vista Outdoor's sales and net earnings. However, the company’s long-term performance hasn’t been nearly as impressive as its recent earnings. Prior to 2020, Vista Outdoor was posting consistent and considerable decreases in its annual revenue. In the span of three years, VSTO lost nearly $800 million on its top line. Additionally, Vista Outdoor's bottom line has remained unpredictable and largely negative over the past four years.