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Central Valley Community Bancorp (CVCY) Hits 52-Week High, Can the Run Continue?

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Have you been paying attention to shares of Central Valley Community Bancorp (CVCY - Free Report) ? Shares have been on the move with the stock up 9.8% over the past month. The stock hit a new 52-week high of $22.89 in the previous session. Central Valley Community Bancorp has gained 50% since the start of the year compared to the 17.9% move for the Zacks Finance sector and the 31.3% return for the Zacks Banks - West industry.

What's Driving the Outperformance?

The stock has an impressive 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 July 21, 2021, Central Valley Community Bancorp reported EPS of $0.6 versus consensus estimate of $0.47 while it beat the consensus revenue estimate by 1.81%.

For the current fiscal year, Central Valley Community Bancorp is expected to post earnings of $2.24 per share on $79.87 million in revenues. This represents a 38.27% change in EPS on a 2.11% change in revenues. For the next fiscal year, the company is expected to earn $1.91 per share on $80.8 million in revenues. This represents a year-over-year change of -14.62% and 1.17%, respectively.

Valuation Metrics

Central Valley Community Bancorp 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.

Central Valley Community Bancorp has a Value Score of B. The stock's Growth and Momentum Scores are C and C, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 10X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 11.4X versus its peer group's average of 12.9X. 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 look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Central Valley Community Bancorp 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 Central Valley Community Bancorp fits the bill. Thus, it seems as though Central Valley Community Bancorp shares could have potential in the weeks and months to come.

How Does Central Valley Community Bancorp Stack Up to the Competition?

Shares of Central Valley Community Bancorp 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 Hanmi Financial (HAFC - Free Report) , RBB Bancorp (RBB - Free Report) , and CPB (CPF - 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 17% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Central Valley Community Bancorp, even beyond its own solid fundamental situation.

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