With Earnings Due, IBD 50 Retailer Floor & Decor Steps Up To Buy Zone

With Q4 earnings due Feb. 25, Floor & Decor (FND) is laying the foundation for a continued climb to a new high. After breaking out in December, FND stock is now testing support at its 10-week moving average.


FND stock joins Nvidia (NVDA), ServiceNow (NOW), Microsoft (MSFT) and fellow retail stock Target (TGT) on the Leaderboard list of top growth stocks.

Boosted by 107% earnings growth in Q3, Floor & Decor has also earned a spot on the IBD 50, along with ServiceNow and NVDA stock.

Find Top Stocks Near Buy Zones With Leaderboard

Floor & Decor Bounces 346% Off Coronavirus Bottom

Based in Atlanta, Floor & Decor is a multichannel specialty retailer operating 128 warehouse-format stores and two design centers across 30 states (as of Q3 2020). The company was founded in 2000 and had its IPO in 2017.

Floor & Decor specializes in hardwood flooring, tile, wood and natural stone. It also offers decorative accessories and installation services.

After the floor fell out of Floor & Decor as the pandemic took hold in February 2020, the retailer found support and rebounded to a 346% gain by January 2021.

Aside from Q2 of 2020, the company continued to post double-digit quarterly earnings and sales growth. Like a crouching tiger getting ready to pounce, Floor & Decor sprang back from 62% decline in earnings in Q2 to a 107% gain in Q3. Sales also rose 31% after buckling 11% in the prior report.

The company scores a passing rating in Stock Checkup with an A SMR Rating, which tracks sales growth, profit margins and return on equity (ROE) as a whole.

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That performance has drawn the attention of leading money managers, helping Floor & Decor earn a spot on the latest list of new buys by the best mutual funds. Plus, 149 funds with an A+ rating from IBD own shares in FND stock.

FND Stock Finds Floorboard Of Support

Since its huge rebound from the coronavirus crash, Floor & Decor has continued higher, showing consistent support. In a sign of stock market leadership, the relative strength line hit a new 52-week high last December as FND stock broke out.

Floor & Decor is a quarter position on Leaderboard, while ServiceNow, TGT stock and NVDA stock are each half positions.

Floor & Decor became extended from support at its benchmark 10-week line. But the stock is finding support again, creating a new buy area.

Keep in mind that it’s risky to buy any stock just before it reports. While analysts expect Floor & Decor to deliver 69% earnings growth in Q4 and a 28% increase for 2020, see how the company reports and Wall Street reacts on Feb. 25 before investing.

Follow Matthew Galgani on Twitter at @IBD_MGalgani


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