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Salem Communications (SALM) Hits 52-Week High, Can the Run Continue?
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Shares of Salem Media Group (SALM - Free Report) have been strong performers lately, with the stock up 52.8% over the past month. The stock hit a new 52-week high of $4.73 in the previous session. Salem Media Group has gained 289.4% since the start of the year compared to the -4.5% move for the Zacks Consumer Discretionary sector and the 14.7% return for the Zacks Broadcast Radio and Television 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 August 4, 2021, Salem Communications reported EPS of $0.08 versus consensus estimate of $-0.01.
For the current fiscal year, Salem Communications is expected to post earnings of $0.44 per share on $249.33 million in revenues. This represents a 128.57% change in EPS on a 5.54% change in revenues. For the next fiscal year, the company is expected to earn $0.13 per share on $252 million in revenues. This represents a year-over-year change of -70.45% and 1.07%, respectively.
Valuation Metrics
Salem Communications 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.
Salem Communications 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 9.2X current fiscal year EPS estimates. 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, Salem Communications 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 Salem Communications fits the bill. Thus, it seems as though Salem Communications shares could still be poised for more gains ahead.
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Salem Communications (SALM) Hits 52-Week High, Can the Run Continue?
Shares of Salem Media Group (SALM - Free Report) have been strong performers lately, with the stock up 52.8% over the past month. The stock hit a new 52-week high of $4.73 in the previous session. Salem Media Group has gained 289.4% since the start of the year compared to the -4.5% move for the Zacks Consumer Discretionary sector and the 14.7% return for the Zacks Broadcast Radio and Television 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 August 4, 2021, Salem Communications reported EPS of $0.08 versus consensus estimate of $-0.01.
For the current fiscal year, Salem Communications is expected to post earnings of $0.44 per share on $249.33 million in revenues. This represents a 128.57% change in EPS on a 5.54% change in revenues. For the next fiscal year, the company is expected to earn $0.13 per share on $252 million in revenues. This represents a year-over-year change of -70.45% and 1.07%, respectively.
Valuation Metrics
Salem Communications 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.
Salem Communications 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 9.2X current fiscal year EPS estimates. 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, Salem Communications 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 Salem Communications fits the bill. Thus, it seems as though Salem Communications shares could still be poised for more gains ahead.