Shares of Veritiv have been strong performers lately, with the stock up 104.7% over the past month. The stock hit a new 52-week high of $49.98 in the previous session. Veritiv has gained 116.4% since the start of the year compared to the 10.6% move for the Zacks Basic Materials sector and the 15.9% return for the Zacks Paper and Related Products 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 March 3, 2021, Veritiv reported EPS of $1.9 versus consensus estimate of $-0.73.
Valuation Metrics
Veritiv 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.
Veritiv has a Value Score of A. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 16.7X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 5.7X versus its peer group's average of 8.4X. 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 look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Veritiv currently has a Zacks Rank of #1 (Strong 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 Veritiv fits the bill. Thus, it seems as though Veritiv shares could still be poised for more gains ahead.
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Veritiv (VRTV) Soars to 52-Week High, Time to Cash Out?
Shares of Veritiv have been strong performers lately, with the stock up 104.7% over the past month. The stock hit a new 52-week high of $49.98 in the previous session. Veritiv has gained 116.4% since the start of the year compared to the 10.6% move for the Zacks Basic Materials sector and the 15.9% return for the Zacks Paper and Related Products 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 March 3, 2021, Veritiv reported EPS of $1.9 versus consensus estimate of $-0.73.
Valuation Metrics
Veritiv 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.
Veritiv has a Value Score of A. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 16.7X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 5.7X versus its peer group's average of 8.4X. 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 look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Veritiv currently has a Zacks Rank of #1 (Strong 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 Veritiv fits the bill. Thus, it seems as though Veritiv shares could still be poised for more gains ahead.