Why Zim Integrated Shipping stock crushed it this week

Container logistics company Zim Integrated Shipping Services (ZIM -2.62%) continues to benefit from high demand for its services, and lately investors have been here for it. The company’s shares have posted double-digit gains in recent days, with the price up more than 11 percent for the week to date as of early Friday morning, according to data compiled by S&P Global Market Intelligence. An encouraging earnings report was the main reason why, and a new analyst note from a Zim bull didn’t hurt either.

Revenues and net income grow nearly 50%

Zim got a jump on its share trading week by releasing second-quarter figures ahead of Monday’s market open. It was a solid quarter for the container carrier. Based on a nearly 11% year-over-year increase in volume carried, the company managed to grow its revenue by nearly 48% to $1.93 billion. Net income also saw strong growth, improving 46% to $19 million. Both headline numbers easily beat analysts’ average estimates.

Most investors are forward-looking, so for almost any type of publicly traded company, forward expectations matter.

Another factor driving Zim stock up was high management guidance. It now expects to post non-IFRS (adjusted) earnings before interest, taxes, depreciation and amortization (EBITDA) of $2.6 billion to $3 billion. That’s quite a jump from the previous forecast of $1.15 billion to $1.55 billion.

It wasn’t just investors who were big on the stock

Shortly after the quarterly results were published, analyst Omar Nokta from Jefferies reiterated its buy recommendation and price target of $22 per share on Zim stock. In its new research note on the company, Nokta wrote admiringly of cost management discipline as revenue and net income rose sharply and said its performance “pointed to a much stronger second half ahead”.