Shares of Echo Global Logistics (
ECHO Quick Quote ECHO - Free Report) have been strong performers lately, with the stock up 15.2% over the past month. The stock hit a new 52-week high of $37.07 in the previous session. Echo Global Logistics has gained 36.3% since the start of the year compared to the 13.6% move for the Zacks Transportation sector and the 14.8% return for the Zacks Transportation - 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 April 28, 2021, Echo Global Logistics reported EPS of $0.61 versus consensus estimate of $0.47 while it beat the consensus revenue estimate by 10.55%.
For the current fiscal year, Echo Global Logistics is expected to post earnings of $1.95 per share on $3.08 billion in revenues. This represents a 46.62% change in EPS on a 22.76% change in revenues. For the next fiscal year, the company is expected to earn $2.08 per share on $3 billion in revenues. This represents a year-over-year change of 6.59% and -2.53%, respectively.
Echo Global Logistics 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 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Echo Global Logistics has a Value Score of C. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 18.8X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 15.1X versus its peer group's average of 12.3X. Additionally, the stock has a PEG ratio of 1.07. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Echo Global Logistics 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 Echo Global Logistics fits the bill. Thus, it seems as though Echo Global Logistics shares could have a bit more room to run in the near term.
How Does Echo Global Logistics Stack Up to the Competition?
Shares of Echo Global Logistics 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 solid potential picks, including Universal Logistics Holdings (
ULH Quick Quote ULH - Free Report) , Deutsche Post ( DPSGY Quick Quote DPSGY - Free Report) , and Matson ( MATX Quick Quote MATX - 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.
The Zacks Industry Rank is in the top 37% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Echo Global Logistics, even beyond its own solid fundamental situation.