TIE beats expectations

I was right: they hit $0.41.
Here's the breakdown
* Sales up 19%
* Earnings up ~30% and beat expectations by 10%. The major driver: the higher ASPs I mentioned. ASPs are 20% and 37% higher than last year.
* Costs increased - something I need to investigate
* Backlog remains ~$1B

I was wrong about the sponge production: that started April and will be additive this quarter. They beat expectations purely on higher ASPs and greater factory utilization: they are now operating at 95% capacity.

TIE is fairly valued based on existing sales: PE ~26 versus EPS growth of 30% (exlcuding one time events). Going forward, however, it's a completely different story.

Scenario #1 - flat EPS.
That's $1.64 in by year end or P/E 22
Keeping the P/E of 26 would mean a stock price of $43

Scenario #2 - Sponge adds $0.02 EPS per quarter
At $22M production per quarter of sponge and a 12% net profit margin, we could get $0.02 more EPS.
EPS = $1.73 or P/E 20
Keeping the P/E of 26 would mean a stock price of $45

Shorts may push this up a bit: 11% short ratio with 12 days to go.

Longer term, I see $40+ within 6 months, but the upside here is limited until then. Fast and furious growth is gone for a while. It really depends on the market willing to recognize the future growth 9 months from now or whether they will be short term focused.

The question is, do we sit tight for a $45 price 9 months from now.