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Masonite (DOOR) Soars to 52-Week High, Time to Cash Out?

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Shares of Masonite International (DOOR - Free Report) have been strong performers lately, with the stock up 16% over the past month. The stock hit a new 52-week high of $115.53 in the previous session. Masonite International has gained 17.2% since the start of the year compared to the 9.7% move for the Zacks Construction sector and the 10.6% return for the Zacks Building Products - Wood 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 February 24, 2021, Masonite reported EPS of $1.26 versus consensus estimate of $1.2 while it beat the consensus revenue estimate by 7.66%.

For the current fiscal year, Masonite is expected to post earnings of $7.6 per share on $2.44 billion in revenues. This represents a 23.58% change in EPS on a 7.96% change in revenues. For the next fiscal year, the company is expected to earn $8.6 per share on $2.57 billion in revenues. This represents a year-over-year change of 13.11% and 5.57%, respectively.

Valuation Metrics

Masonite 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.

Masonite has a Value Score of B. The stock's Growth and Momentum Scores are A and F, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 15.2X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 14.9X versus its peer group's average of 15X. 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, Masonite 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 Masonite passes the test. Thus, it seems as though Masonite shares could have a bit more room to run in the near term.

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