We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
ChampionX Corporation (CHX) Hits Fresh High: Is There Still Room to Run?
Read MoreHide Full Article
Have you been paying attention to shares of ChampionX (CHX - Free Report) ? Shares have been on the move with the stock up 55.6% over the past month. The stock hit a new 52-week high of $32.81 in the previous session. ChampionX has gained 61.9% since the start of the year compared to the -20% move for the Zacks Construction sector and the 8.4% return for the Zacks Engineering - R and D Services industry.
What's Driving the Outperformance?
The stock has an impressive 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 October 25, 2022, ChampionX reported EPS of $0.33 versus consensus estimate of $0.31 while it beat the consensus revenue estimate by 7.99%.
For the current fiscal year, ChampionX is expected to post earnings of $1.21 per share on $3.83 billion in revenues. This represents a 101.67% change in EPS on a 24.39% change in revenues. For the next fiscal year, the company is expected to earn $1.72 per share on $4.13 billion in revenues. This represents a year-over-year change of 42.69% and 7.94%, respectively.
Valuation Metrics
ChampionX 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 is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort 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.
ChampionX has a Value Score of C. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 27.1X current fiscal year EPS estimates, which is a premium to the peer industry average of 23X. On a trailing cash flow basis, the stock currently trades at 18.1X versus its peer group's average of 10.8X. Additionally, the stock has a PEG ratio of 0.47. 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, ChampionX currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
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 ChampionX passes the test. Thus, it seems as though ChampionX shares could still be poised for more gains ahead.
How Does CHX Stack Up to the Competition?
Shares of CHX have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Sterling Infrastructure, Inc. (STRL - Free Report) . STRL has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. Sterling Infrastructure, Inc. beat our consensus estimate by 11.49%, and for the current fiscal year, STRL is expected to post earnings of $3.37 per share on revenue of $1.92 billion.
Shares of Sterling Infrastructure, Inc. have gained 36.2% over the past month, and currently trade at a forward P/E of 10.12X and a P/CF of 9.33X.
The Engineering - R and D Services industry may rank in the bottom 51% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for CHX and STRL, even beyond their own solid fundamental situation.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
ChampionX Corporation (CHX) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of ChampionX (CHX - Free Report) ? Shares have been on the move with the stock up 55.6% over the past month. The stock hit a new 52-week high of $32.81 in the previous session. ChampionX has gained 61.9% since the start of the year compared to the -20% move for the Zacks Construction sector and the 8.4% return for the Zacks Engineering - R and D Services industry.
What's Driving the Outperformance?
The stock has an impressive 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 October 25, 2022, ChampionX reported EPS of $0.33 versus consensus estimate of $0.31 while it beat the consensus revenue estimate by 7.99%.
For the current fiscal year, ChampionX is expected to post earnings of $1.21 per share on $3.83 billion in revenues. This represents a 101.67% change in EPS on a 24.39% change in revenues. For the next fiscal year, the company is expected to earn $1.72 per share on $4.13 billion in revenues. This represents a year-over-year change of 42.69% and 7.94%, respectively.
Valuation Metrics
ChampionX 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 is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort 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.
ChampionX has a Value Score of C. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 27.1X current fiscal year EPS estimates, which is a premium to the peer industry average of 23X. On a trailing cash flow basis, the stock currently trades at 18.1X versus its peer group's average of 10.8X. Additionally, the stock has a PEG ratio of 0.47. 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, ChampionX currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
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 ChampionX passes the test. Thus, it seems as though ChampionX shares could still be poised for more gains ahead.
How Does CHX Stack Up to the Competition?
Shares of CHX have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Sterling Infrastructure, Inc. (STRL - Free Report) . STRL has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. Sterling Infrastructure, Inc. beat our consensus estimate by 11.49%, and for the current fiscal year, STRL is expected to post earnings of $3.37 per share on revenue of $1.92 billion.
Shares of Sterling Infrastructure, Inc. have gained 36.2% over the past month, and currently trade at a forward P/E of 10.12X and a P/CF of 9.33X.
The Engineering - R and D Services industry may rank in the bottom 51% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for CHX and STRL, even beyond their own solid fundamental situation.