Motorcycle manufacturer Harley-Davidson(HOG) delivered a string of positive earnings surprises, causing the stock to become a Zacks#1 Rank (Strong Buy.)

The Wisconsin-based company, which has a cult-like following, produced an average earnings surprise of 8.61% over the trailing four quarters and has seen its stock price rise roughly 24% year-to-date. Given its estimated long-term earnings growth projection of nearly 12%, the stock is a worthwhile prospect for aggressive growth investors.

Harley-Davidson commands a lion’s share of the U.S. motorcycle market, banking on a strong brand that combines an intriguing blend of power, motif and style. Besides a strong earnings momentum, other areas of strength include consistent revenue growth, expanding margins and a healthy price performance.

The company saw a 44% surge in profits during the first quarter of 2012, reported on April 25, sending its shares up roughly 6% to close at $53.49. Earnings of 74 cents per share topped the Zacks Consensus Estimate by 3 cents.

Consolidated revenues (including financial services) cruised 17% year-over-year to $1.43 billion, riding on higher motorcycles and related products sales.

Additionally, Harley-Davidson beefed up its shipment guidance for 2012 and now expects to ship 245,000 to 250,000 motorcycles globally this year, compared with its prior guidance of 240,000 to 245,000. The optimism, in part, reflects strong U.S. demand.

The Zacks estimate for 2012 has moved up 3% over the last 60 days to $2.83 a share, representing an estimated annualized growth of roughly 21%. For 2013, the Zacks estimate rose by roughly 6% to $3.60 per share over the same period, reflecting an estimated growth of around 27%.

Harley-Davidson’s price performance has been reasonably strong with the chart below showing an upward trend with a few minor pullbacks. The earnings estimates have consistently guided the stock to rally higher, something which aggressive growth investors should find attractive.

When analyzing the stock through valuation ratios, Harley-Davidson trades at a premium to its peers by most metrics. It has a PEG ratio of 1.47, a 47% premium to the benchmark of 1 for a fairly priced stock. Moreover, the stock is currently trading at a forward P/E of 17.08x, a roughly 88% premium to the peer group average of 9.09x. The P/B ratio of 4.32x is also higher than the peer group average of 2.38x.

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