Have you been paying attention to shares of Orrstown Financial Services (
ORRF Quick Quote ORRF - Free Report) ? Shares have been on the move with the stock up 10.4% over the past month. The stock hit a new 52-week high of $25.41 in the previous session. Orrstown Financial Services has gained 51.1% since the start of the year compared to the 16.4% move for the Zacks Finance sector and the 36.5% return for the Zacks Banks - Northeast 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 20, 2021, Orrstown reported EPS of $0.92 versus consensus estimate of $0.77 while it missed the consensus revenue estimate by 2%.
For the current fiscal year, Orrstown is expected to post earnings of $2.64 per share on $111.68 million in revenues. This represents a 4.76% change in EPS on a -0.21% change in revenues. For the next fiscal year, the company is expected to earn $1.79 per share on $102.77 million in revenues. This represents a year-over-year change of -32.2% and -7.98%, respectively.
Orrstown 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. 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.
Orrstown has a Value Score of A. The stock's Growth and Momentum Scores are D and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 9.5X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 9.3X versus its peer group's average of 12.1X. 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, Orrstown 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 Orrstown meets the list of requirements. Thus, it seems as though Orrstown shares could have a bit more room to run in the near term.
How Does Orrstown Stack Up to the Competition?
Shares of Orrstown have been rising, 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 Sandy Spring Bancorp (
SASR Quick Quote SASR - Free Report) , Citizens Financial Services ( CZFS Quick Quote CZFS - Free Report) , and Nicolet Bankshares ( NCBS Quick Quote NCBS - 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 13% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Orrstown, even beyond its own solid fundamental situation.