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Veritiv (VRTV) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of Veritiv ? Shares have been on the move with the stock up 46.7% over the past month. The stock hit a new 52-week high of $66.1 in the previous session. Veritiv has gained 195.4% since the start of the year compared to the 25.5% move for the Zacks Basic Materials sector and the 26.9% 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 May 5, 2021, Veritiv reported EPS of $1.28 versus consensus estimate of $0.02.
Valuation Metrics
While Veritiv has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? 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 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.
Veritiv has a Value Score of A. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 13.7X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 8.2X versus its peer group's average of 9.9X. 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, 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 passes the test. Thus, it seems as though Veritiv shares could have potential in the weeks and months to come.
How Does Veritiv Stack Up to the Competition?
Shares of Veritiv have been moving higher, 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 looking good, including SMURFIT KAPPA (SMFKY - Free Report) , Domtar , and International Paper (IP - 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 18% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Veritiv, even beyond its own solid fundamental situation.
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Veritiv (VRTV) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Veritiv ? Shares have been on the move with the stock up 46.7% over the past month. The stock hit a new 52-week high of $66.1 in the previous session. Veritiv has gained 195.4% since the start of the year compared to the 25.5% move for the Zacks Basic Materials sector and the 26.9% 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 May 5, 2021, Veritiv reported EPS of $1.28 versus consensus estimate of $0.02.
Valuation Metrics
While Veritiv has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? 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 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.
Veritiv has a Value Score of A. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 13.7X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 8.2X versus its peer group's average of 9.9X. 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, 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 passes the test. Thus, it seems as though Veritiv shares could have potential in the weeks and months to come.
How Does Veritiv Stack Up to the Competition?
Shares of Veritiv have been moving higher, 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 looking good, including SMURFIT KAPPA (SMFKY - Free Report) , Domtar , and International Paper (IP - 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 18% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Veritiv, even beyond its own solid fundamental situation.