Have you been paying attention to shares of K12 (LRN - Free Report) ? Shares have been on the move with the stock up 17.3% over the past month. The stock hit a new 52-week high of $54.42 in the previous session. K12 has gained 70.2% since the start of the year compared to the 0.7% move for the Zacks Consumer Discretionary sector and the 20.3% return for the Zacks Schools 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 October 24, 2023, K12 reported EPS of $0.11 versus consensus estimate of $-0.39 while it beat the consensus revenue estimate by 5.25%.
For the current fiscal year, K12 is expected to post earnings of $3.76 per share on $2 billion in revenues. This represents a 26.6% change in EPS on an 8.73% change in revenues. For the next fiscal year, the company is expected to earn $4.18 per share on $2.08 billion in revenues. This represents a year-over-year change of 11.26% and 4.07%, respectively.
Valuation Metrics
K12 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.
K12 has a Value Score of B. 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 14.2X current fiscal year EPS estimates, which is not in-line with the peer industry average of 18.8X. On a trailing cash flow basis, the stock currently trades at 9.6X versus its peer group's average of 9X. Additionally, the stock has a PEG ratio of 0.71. 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, K12 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 K12 fits the bill. Thus, it seems as though K12 shares could still be poised for more gains ahead.
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Have you been paying attention to shares of K12 (LRN - Free Report) ? Shares have been on the move with the stock up 17.3% over the past month. The stock hit a new 52-week high of $54.42 in the previous session. K12 has gained 70.2% since the start of the year compared to the 0.7% move for the Zacks Consumer Discretionary sector and the 20.3% return for the Zacks Schools 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 October 24, 2023, K12 reported EPS of $0.11 versus consensus estimate of $-0.39 while it beat the consensus revenue estimate by 5.25%.
For the current fiscal year, K12 is expected to post earnings of $3.76 per share on $2 billion in revenues. This represents a 26.6% change in EPS on an 8.73% change in revenues. For the next fiscal year, the company is expected to earn $4.18 per share on $2.08 billion in revenues. This represents a year-over-year change of 11.26% and 4.07%, respectively.
Valuation Metrics
K12 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.
K12 has a Value Score of B. 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 14.2X current fiscal year EPS estimates, which is not in-line with the peer industry average of 18.8X. On a trailing cash flow basis, the stock currently trades at 9.6X versus its peer group's average of 9X. Additionally, the stock has a PEG ratio of 0.71. 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, K12 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 K12 fits the bill. Thus, it seems as though K12 shares could still be poised for more gains ahead.
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
Get the latest research report on LRN - FREE