Have you been paying attention to shares of Xcerra ? Shares have been on the move with the stock up 7.5% over the past month. XCRA hit a new 52-week high of $14.24 in the previous session. Xcerra has gained 45.4% since the start of the year compared to the 9.1% move for the Computer and Technology sector and the 24.5% year-to-date return for its peer group.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on May 23, 2018, Xcerra reported EPS of $0.24 versus the Zacks Consensus Estimate of $0.21 while it beat the consensus revenue estimate by 2.68%.
For the current fiscal year, Xcerra is expected to post earnings of $1.03 per share on $469.37 million in revenues. This represents a 110.2% change in EPS on a 20.11% change in revenues. For the next fiscal year, the company is expected to earn $1.1 per share on $490.57 million in revenues. This represents a year-over-year change of 6.16% and 4.52%, respectively.
Valuation Metrics
Xcerra may be at a 52-week high right now, but what might the future hold for XCRA? 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Xcerra has a Value Score of A. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 13.8X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 23.2X versus its peer group's average of 16.3X. Additionally, the stock has a PEG ratio of 1.15. 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, Xcerra 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 and Style Scores of A or B, it looks as if Xcerra fits the bill. Thus, it seems as though XCRA shares could still be poised for more gains ahead.
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Xcerra (XCRA) Hits Fresh Highs: Is There Still Room to Run?
Have you been paying attention to shares of Xcerra ? Shares have been on the move with the stock up 7.5% over the past month. XCRA hit a new 52-week high of $14.24 in the previous session. Xcerra has gained 45.4% since the start of the year compared to the 9.1% move for the Computer and Technology sector and the 24.5% year-to-date return for its peer group.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on May 23, 2018, Xcerra reported EPS of $0.24 versus the Zacks Consensus Estimate of $0.21 while it beat the consensus revenue estimate by 2.68%.
For the current fiscal year, Xcerra is expected to post earnings of $1.03 per share on $469.37 million in revenues. This represents a 110.2% change in EPS on a 20.11% change in revenues. For the next fiscal year, the company is expected to earn $1.1 per share on $490.57 million in revenues. This represents a year-over-year change of 6.16% and 4.52%, respectively.
Valuation Metrics
Xcerra may be at a 52-week high right now, but what might the future hold for XCRA? 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Xcerra has a Value Score of A. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 13.8X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 23.2X versus its peer group's average of 16.3X. Additionally, the stock has a PEG ratio of 1.15. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Xcerra Corporation Price and Consensus
Xcerra Corporation Price and Consensus | Xcerra Corporation Quote
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, Xcerra 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 and Style Scores of A or B, it looks as if Xcerra fits the bill. Thus, it seems as though XCRA shares could still be poised for more gains ahead.