The stock has done great after the earnings. The momentum has taken it 35% above the 52 week low made in September. It looks good for more, but its performance in subsequent quarters needs to be good. This time it beat analyst estimates of earnings by just one cent. The stock had been correcting for many months, and the level of shorts was extremely high. That could have been one factor for such a strong reaction. Goldman Sachs recently upgraded the stock from buy to a conviction-buy, and analysts at Jefferies Group reiterated their hold rating with a price target of $42. Deutsche Bank also increased the target price to $55 from $52 with a buy rating. An article on Motley fool was positive about the future prospects of the company, and expected it to do better compared to GNC Holdings (GNC). The analyst's opinion was primarily based on better performance of VSI over the last few years. The valuations of VSI are still okay compared to some peers, though further rise in the stock price could lead to some stretching on that account. The ttm P/E is 25 and the forward P/E is 21. Growth in vitamins and supplements market is likely to be robust, and players like VSI can leverage the opportunity to their advantage. The growth potential is evident from the performance of MusclePharm (MSLP) which has moved from scratch to $100 million in revenues in a few years. For Vitamin Shoppe, the ttm revenues are $1.05 billion and the net income is $65 million. This indicates prospects of moderate improvement compared to 2012 when the revenues were $950 million and the net income was $60 million. It needs to be more consistent in its performance so that the uptrend is sustained. Next few quarters will be important.
