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ChannelAdvisor (ECOM) Hits Fresh High: Is There Still Room to Run?
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Shares of ChannelAdvisor have been strong performers lately, with the stock up 49.9% over the past month. The stock hit a new 52-week high of $12.14 in the previous session. ChannelAdvisor has gained 32.2% since the start of the year compared to the 1.3% move for the Zacks Computer and Technology sector and the 11.8% return for the Zacks Internet - Software and Services 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 May 7, 2020, ChannelAdvisor reported EPS of $0.17 versus consensus estimate of $0.08 while it beat the consensus revenue estimate by 1.66%.
For the current fiscal year, ChannelAdvisor is expected to post earnings of $0.49 per share on $131.78 million in revenues. This represents a 22.5% change in EPS on a 1.4% change in revenues. For the next fiscal year, the company is expected to earn $0.57 per share on $138.05 million in revenues. This represents a year-over-year change of 16.33% and 4.76%, respectively.
Valuation Metrics
ChannelAdvisor 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 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
ChannelAdvisor 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 B.
In terms of its value breakdown, the stock currently trades at 24.5X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 31.1X versus its peer group's average of 14.9X. 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 consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, ChannelAdvisor 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 ChannelAdvisor fits the bill. Thus, it seems as though ChannelAdvisor shares could have potential in the weeks and months to come.
How Does ChannelAdvisor Stack Up to the Competition?
Shares of ChannelAdvisor have been soaring, 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 solid potential picks, including Donnelley Financial Solutions (DFIN - Free Report) , VeriSign (VRSN - Free Report) , and ServiceNow (NOW - 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.
The Zacks Industry Rank is in the top 30% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ChannelAdvisor, even beyond its own solid fundamental situation.
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ChannelAdvisor (ECOM) Hits Fresh High: Is There Still Room to Run?
Shares of ChannelAdvisor have been strong performers lately, with the stock up 49.9% over the past month. The stock hit a new 52-week high of $12.14 in the previous session. ChannelAdvisor has gained 32.2% since the start of the year compared to the 1.3% move for the Zacks Computer and Technology sector and the 11.8% return for the Zacks Internet - Software and Services 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 May 7, 2020, ChannelAdvisor reported EPS of $0.17 versus consensus estimate of $0.08 while it beat the consensus revenue estimate by 1.66%.
For the current fiscal year, ChannelAdvisor is expected to post earnings of $0.49 per share on $131.78 million in revenues. This represents a 22.5% change in EPS on a 1.4% change in revenues. For the next fiscal year, the company is expected to earn $0.57 per share on $138.05 million in revenues. This represents a year-over-year change of 16.33% and 4.76%, respectively.
Valuation Metrics
ChannelAdvisor 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 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
ChannelAdvisor 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 B.
In terms of its value breakdown, the stock currently trades at 24.5X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 31.1X versus its peer group's average of 14.9X. 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 consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, ChannelAdvisor 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 ChannelAdvisor fits the bill. Thus, it seems as though ChannelAdvisor shares could have potential in the weeks and months to come.
How Does ChannelAdvisor Stack Up to the Competition?
Shares of ChannelAdvisor have been soaring, 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 solid potential picks, including Donnelley Financial Solutions (DFIN - Free Report) , VeriSign (VRSN - Free Report) , and ServiceNow (NOW - 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.
The Zacks Industry Rank is in the top 30% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ChannelAdvisor, even beyond its own solid fundamental situation.