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Perion Network (PERI) Soars to 52-Week High, Time to Cash Out?
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Shares of Perion Network (PERI - Free Report) have been strong performers lately, with the stock up 30.9% over the past month. The stock hit a new 52-week high of $33.09 in the previous session. Perion Network has gained 135.4% since the start of the year compared to the 28.7% move for the Zacks Computer and Technology sector and the 3.4% return for the Zacks Internet - Content 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 October 26, 2021, Perion Network reported EPS of $0.28 versus consensus estimate of $0.18 while it beat the consensus revenue estimate by 12.17%.
For the current fiscal year, Perion Network is expected to post earnings of $0.87 per share on $460.44 million in revenues. This represents a 141.67% change in EPS on a 40.35% change in revenues. For the next fiscal year, the company is expected to earn $1.05 per share on $588.12 million in revenues. This represents a year-over-year change of 21.84% and 27.73%, respectively.
Valuation Metrics
Perion Network 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.
Perion Network has a Value Score of C. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 34.7X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 48.7X versus its peer group's average of 28.4X. Additionally, the stock has a PEG ratio of 1.39. 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, Perion Network currently has a Zacks Rank of #2 (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 Perion Network fits the bill. Thus, it seems as though Perion Network shares could have potential in the weeks and months to come.
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Perion Network (PERI) Soars to 52-Week High, Time to Cash Out?
Shares of Perion Network (PERI - Free Report) have been strong performers lately, with the stock up 30.9% over the past month. The stock hit a new 52-week high of $33.09 in the previous session. Perion Network has gained 135.4% since the start of the year compared to the 28.7% move for the Zacks Computer and Technology sector and the 3.4% return for the Zacks Internet - Content 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 October 26, 2021, Perion Network reported EPS of $0.28 versus consensus estimate of $0.18 while it beat the consensus revenue estimate by 12.17%.
For the current fiscal year, Perion Network is expected to post earnings of $0.87 per share on $460.44 million in revenues. This represents a 141.67% change in EPS on a 40.35% change in revenues. For the next fiscal year, the company is expected to earn $1.05 per share on $588.12 million in revenues. This represents a year-over-year change of 21.84% and 27.73%, respectively.
Valuation Metrics
Perion Network 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.
Perion Network has a Value Score of C. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 34.7X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 48.7X versus its peer group's average of 28.4X. Additionally, the stock has a PEG ratio of 1.39. 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, Perion Network currently has a Zacks Rank of #2 (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 Perion Network fits the bill. Thus, it seems as though Perion Network shares could have potential in the weeks and months to come.