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United Natural (UNFI) Hits 52-Week High, Can the Run Continue?
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Have you been paying attention to shares of United Natural Foods (UNFI - Free Report) ? Shares have been on the move with the stock up 10.5% over the past month. The stock hit a new 52-week high of $57.89 in the previous session. United Natural Foods has gained 248.2% since the start of the year compared to the 3.2% move for the Zacks Consumer Staples sector and the -0.3% return for the Zacks Food - Miscellaneous industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on December 8, 2021, United Natural reported EPS of $0.97 versus consensus estimate of $0.61 while it missed the consensus revenue estimate by 2.03%.
For the current fiscal year, United Natural is expected to post earnings of $4.08 per share on $28.03 billion in revenues. This represents a 5.15% change in EPS on a 4.14% change in revenues. For the next fiscal year, the company is expected to earn $4.29 per share on $29.04 billion in revenues. This represents a year-over-year change of 5.07% and 3.61%, respectively.
Valuation Metrics
United Natural may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
United Natural has a Value Score of A. The stock's Growth and Momentum Scores are C and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 13.6X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 6.1X versus its peer group's average of 13.2X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, United Natural currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if United Natural fits the bill. Thus, it seems as though United Natural shares could have a bit more room to run in the near term.
How Does United Natural Stack Up to the Competition?
Shares of United Natural have been moving higher, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also looking good, including Flowers Foods (FLO - Free Report) , The Hain Celestial Group (HAIN - Free Report) , and United Natural Foods (UNFI - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
However, it is worth noting that the Zacks Industry Rank for this group is in the bottom half of the ranking, so it isn't all good news for United Natural. Still, the fundamentals for United Natural are promising, and it still has potential despite being at a 52-week high.
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United Natural (UNFI) Hits 52-Week High, Can the Run Continue?
Have you been paying attention to shares of United Natural Foods (UNFI - Free Report) ? Shares have been on the move with the stock up 10.5% over the past month. The stock hit a new 52-week high of $57.89 in the previous session. United Natural Foods has gained 248.2% since the start of the year compared to the 3.2% move for the Zacks Consumer Staples sector and the -0.3% return for the Zacks Food - Miscellaneous industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on December 8, 2021, United Natural reported EPS of $0.97 versus consensus estimate of $0.61 while it missed the consensus revenue estimate by 2.03%.
For the current fiscal year, United Natural is expected to post earnings of $4.08 per share on $28.03 billion in revenues. This represents a 5.15% change in EPS on a 4.14% change in revenues. For the next fiscal year, the company is expected to earn $4.29 per share on $29.04 billion in revenues. This represents a year-over-year change of 5.07% and 3.61%, respectively.
Valuation Metrics
United Natural may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
United Natural has a Value Score of A. The stock's Growth and Momentum Scores are C and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 13.6X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 6.1X versus its peer group's average of 13.2X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, United Natural currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if United Natural fits the bill. Thus, it seems as though United Natural shares could have a bit more room to run in the near term.
How Does United Natural Stack Up to the Competition?
Shares of United Natural have been moving higher, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also looking good, including Flowers Foods (FLO - Free Report) , The Hain Celestial Group (HAIN - Free Report) , and United Natural Foods (UNFI - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
However, it is worth noting that the Zacks Industry Rank for this group is in the bottom half of the ranking, so it isn't all good news for United Natural. Still, the fundamentals for United Natural are promising, and it still has potential despite being at a 52-week high.