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Here's Why You Should Retain CoreLogic (CLGX) Stock Now

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CoreLogic, Inc. (CLGX - Free Report) has an impressive Growth Score of A. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of quality and sustainability of its growth.

The company has an expected long-term earnings per share (three to five years) growth rate of 12%. Further, earnings are anticipated to register 10.8% in 2021.

The company’s shares have surged 76.8% in the past year compared with 21.8% rally of the industry it belongs to.

Factors That Bode Well

CoreLogic’s top line is benefiting from strength in core mortgage and insurance as well as spatial solutions. The bottom line is being driven by revenue growth, operating leverage, better business mix and cost-efficiency programs.

Recently, the company raised guidance for 2021. It is optimistic about its annual results on the back of organic revenue growth, operational efficacy and market volumes.

CoreLogic expects revenues of $1.64-$1.675 billion compared with the prior guidance of $1.585-$1.630 billion.  Adjusted earnings per share (EPS) are anticipated in the range of $4.40-$4.65 compared with the prior guidance of $4.00-$4.20.

Adjusted EBITDA is now anticipated between $575 million and $600 million compared with the prior guidance of $625-$650 million.

Besides, CoreLogic is working on strategic initiatives aimed at long-term growth. It is investing in products and solutions, operational capabilities, technology platforms and infrastructure to build strong strategic client partnerships.

Risks Associated

CoreLogic's total debt to total capital ratio of 0.59 was higher than the industry’s 0.03 at the end of the third quarter of 2020. A high debt to capitalization ratio indicates higher risk of insolvency in challenging times.

Further, the company’s cash and cash equivalent of $302 million at the end of the quarter was well below the long-term debt level of $1.57 billion, underscoring that the company doesn’t have enough cash to meet this debt burden. However, the cash level can meet the short-term debt of $21 million.

Zacks Rank and Key Picks

CoreLogic currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Business Services sector are Republic Services (RSG - Free Report) , Gartner, Inc. (IT - Free Report) and NV5 Global (NVEE - Free Report) . Republic Services and NV5 Global carry a Zacks Rank #2 (Buy), while Gartner sports a Zacks #1 Rank (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term expected earnings per share (three to five years) growth rate for Republic Services, Gartner and NV5 Global 9.4%, 13.5% and 16.8%, respectively.

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