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Henry Schein (HSIC) Hits 52-Week High, Can the Run Continue?
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Have you been paying attention to shares of Henry Schein (HSIC - Free Report) ? Shares have been on the move with the stock up 2.8% over the past month. The stock hit a new 52-week high of $89.48 in the previous session. Henry Schein has gained 14.5% since the start of the year compared to the -4.1% move for the Zacks Medical sector and the -0.6% return for the Zacks Medical - Dental Supplies 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 February 15, 2022, Henry Schein reported EPS of $1.07 versus consensus estimate of $0.9.
For the current fiscal year, Henry Schein is expected to post earnings of $4.86 per share on $13.2 billion in revenues. This represents a 7.52% change in EPS on a 6.43% change in revenues. For the next fiscal year, the company is expected to earn $5.22 per share on $13.66 billion in revenues. This represents a year-over-year change of 7.46% and 3.52%, respectively.
Valuation Metrics
Henry Schein 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 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.
Henry Schein has a Value Score of A. The stock's Growth and Momentum Scores are B and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 18.3X current fiscal year EPS estimates, which is not in-line with the peer industry average of 20.9X. On a trailing cash flow basis, the stock currently trades at 14.5X versus its peer group's average of 13.8X. Additionally, the stock has a PEG ratio of 1.54. 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, Henry Schein 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 Henry Schein meets the list of requirements. Thus, it seems as though Henry Schein shares could still be poised for more gains ahead.
How Does HSIC Stack Up to the Competition?
Shares of HSIC have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is McKesson Corporation (MCK - Free Report) . MCK has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of C.
Earnings were strong last quarter. McKesson Corporation beat our consensus estimate by 14.31%, and for the current fiscal year, MCK is expected to post earnings of $22.69 per share on revenue of $261.47 billion.
Shares of McKesson Corporation have gained 13% over the past month, and currently trade at a forward P/E of 12.84X and a P/CF of 12.48X.
The Medical - Dental Supplies industry is in the top 42% of all the industries we have in our universe, so it looks like there are some nice tailwinds for HSIC and MCK, even beyond their own solid fundamental situation.
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Henry Schein (HSIC) Hits 52-Week High, Can the Run Continue?
Have you been paying attention to shares of Henry Schein (HSIC - Free Report) ? Shares have been on the move with the stock up 2.8% over the past month. The stock hit a new 52-week high of $89.48 in the previous session. Henry Schein has gained 14.5% since the start of the year compared to the -4.1% move for the Zacks Medical sector and the -0.6% return for the Zacks Medical - Dental Supplies 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 February 15, 2022, Henry Schein reported EPS of $1.07 versus consensus estimate of $0.9.
For the current fiscal year, Henry Schein is expected to post earnings of $4.86 per share on $13.2 billion in revenues. This represents a 7.52% change in EPS on a 6.43% change in revenues. For the next fiscal year, the company is expected to earn $5.22 per share on $13.66 billion in revenues. This represents a year-over-year change of 7.46% and 3.52%, respectively.
Valuation Metrics
Henry Schein 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 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.
Henry Schein has a Value Score of A. The stock's Growth and Momentum Scores are B and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 18.3X current fiscal year EPS estimates, which is not in-line with the peer industry average of 20.9X. On a trailing cash flow basis, the stock currently trades at 14.5X versus its peer group's average of 13.8X. Additionally, the stock has a PEG ratio of 1.54. 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, Henry Schein 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 Henry Schein meets the list of requirements. Thus, it seems as though Henry Schein shares could still be poised for more gains ahead.
How Does HSIC Stack Up to the Competition?
Shares of HSIC have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is McKesson Corporation (MCK - Free Report) . MCK has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of C.
Earnings were strong last quarter. McKesson Corporation beat our consensus estimate by 14.31%, and for the current fiscal year, MCK is expected to post earnings of $22.69 per share on revenue of $261.47 billion.
Shares of McKesson Corporation have gained 13% over the past month, and currently trade at a forward P/E of 12.84X and a P/CF of 12.48X.
The Medical - Dental Supplies industry is in the top 42% of all the industries we have in our universe, so it looks like there are some nice tailwinds for HSIC and MCK, even beyond their own solid fundamental situation.