Shares of Jacobs Engineering Group (J - Free Report) have been strong performers lately, with the stock up 8.2% over the past month. The stock hit a new 52-week high of $146.1 in the previous session. Jacobs Engineering Group has gained 33.1% since the start of the year compared to the 26% move for the Zacks Construction sector and the 38.8% return for the Zacks Engineering - R and D 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 August 3, 2021, Jacobs Engineering reported EPS of $1.64 versus consensus estimate of $1.48.
For the current fiscal year, Jacobs Engineering is expected to post earnings of $7.1 per share on $14.3 billion in revenues.
Valuation Metrics
Jacobs Engineering 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.
Jacobs Engineering has a Value Score of C. The stock's Growth and Momentum Scores are B and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 20.4X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 17.6X versus its peer group's average of 15.5X. Additionally, the stock has a PEG ratio of 1.55. 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, Jacobs Engineering 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 Jacobs Engineering fits the bill. Thus, it seems as though Jacobs Engineering shares could have a bit more room to run in the near term.
How Does Jacobs Engineering Stack Up to the Competition?
Shares of Jacobs Engineering 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 impressive, including Jacobs Engineering Group (J - Free Report) , EMCOR Group (EME - Free Report) , and Thor Industries (THO - 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 Jacobs Engineering. Still, the fundamentals for Jacobs Engineering are promising, and it still has potential despite being at a 52-week high.
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Shares of Jacobs Engineering Group (J - Free Report) have been strong performers lately, with the stock up 8.2% over the past month. The stock hit a new 52-week high of $146.1 in the previous session. Jacobs Engineering Group has gained 33.1% since the start of the year compared to the 26% move for the Zacks Construction sector and the 38.8% return for the Zacks Engineering - R and D 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 August 3, 2021, Jacobs Engineering reported EPS of $1.64 versus consensus estimate of $1.48.
For the current fiscal year, Jacobs Engineering is expected to post earnings of $7.1 per share on $14.3 billion in revenues.
Valuation Metrics
Jacobs Engineering 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.
Jacobs Engineering has a Value Score of C. The stock's Growth and Momentum Scores are B and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 20.4X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 17.6X versus its peer group's average of 15.5X. Additionally, the stock has a PEG ratio of 1.55. 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, Jacobs Engineering 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 Jacobs Engineering fits the bill. Thus, it seems as though Jacobs Engineering shares could have a bit more room to run in the near term.
How Does Jacobs Engineering Stack Up to the Competition?
Shares of Jacobs Engineering 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 impressive, including Jacobs Engineering Group (J - Free Report) , EMCOR Group (EME - Free Report) , and Thor Industries (THO - 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 Jacobs Engineering. Still, the fundamentals for Jacobs Engineering are promising, and it still has potential despite being at a 52-week high.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
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