Shares of Littelfuse (
LFUS Quick Quote LFUS - Free Report) have been strong performers lately, with the stock up 13.7% over the past month. The stock hit a new 52-week high of $332.67 in the previous session. Littelfuse has gained 27.4% since the start of the year compared to the 28.7% move for the Zacks Computer and Technology sector and the -0.5% return for the Zacks Electronics - Miscellaneous Components 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, Littelfuse reported EPS of $3.95 versus consensus estimate of $3.15 while it beat the consensus revenue estimate by 3.75%.
For the current fiscal year, Littelfuse is expected to post earnings of $12.67 per share on $2.03 billion in revenues. This represents a 97.97% change in EPS on a 40.08% change in revenues. For the next fiscal year, the company is expected to earn $12.98 per share on $2.19 billion in revenues. This represents a year-over-year change of 2.47% and 7.91%, respectively.
Littelfuse 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.
Littelfuse has a Value Score of C. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 25.6X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 31.2X versus its peer group's average of 16.7X. Additionally, the stock has a PEG ratio of 2.13. 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 look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Littelfuse 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 Littelfuse meets the list of requirements. Thus, it seems as though Littelfuse shares could have a bit more room to run in the near term.
How Does Littelfuse Stack Up to the Competition?
Shares of Littelfuse 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 CTS (
CTS Quick Quote CTS - Free Report) , OSI Systems ( OSIS Quick Quote OSIS - Free Report) , and Fabrinet ( FN Quick Quote FN - 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.
However, it is worth noting that the Zacks Industry Rank for this group is in the bottom half of the ranking, so it isn't all good news for Littelfuse. Still, the fundamentals for Littelfuse are promising, and it still has potential despite being at a 52-week high.