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Lantheus Holdings, Inc. (LNTH) Hits Fresh High: Is There Still Room to Run?

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Have you been paying attention to shares of Lantheus Holdings (LNTH - Free Report) ? Shares have been on the move with the stock up 19.6% over the past month. The stock hit a new 52-week high of $83.93 in the previous session. Lantheus Holdings has gained 174.1% since the start of the year compared to the -14.9% move for the Zacks Medical sector and the -40% return for the Zacks Medical - Products 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 August 4, 2022, Lantheus Holdings reported EPS of $0.89 versus consensus estimate of $0.7 while it beat the consensus revenue estimate by 9.68%.

For the current fiscal year, Lantheus Holdings is expected to post earnings of $3.08 per share on $900.67 million in revenues. This represents a 528.57% change in EPS on a 111.82% change in revenues. For the next fiscal year, the company is expected to earn $3.62 per share on $995.56 million in revenues. This represents a year-over-year change of 17.53% and 10.53%, respectively.

Valuation Metrics

Lantheus Holdings 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.

Lantheus Holdings has a Value Score of F. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 25.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 22.9X. On a trailing cash flow basis, the stock currently trades at 61.8X versus its peer group's average of 13.7X. 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, Lantheus Holdings currently has a Zacks Rank of #1 (Strong 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 Lantheus Holdings passes the test. Thus, it seems as though Lantheus Holdings shares could have a bit more room to run in the near term.

How Does LNTH Stack Up to the Competition?

Shares of LNTH 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 Zimmer Biomet Holdings, Inc. (ZBH - Free Report) . ZBH has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of C, and a Momentum Score of C.

Earnings were strong last quarter. Zimmer Biomet Holdings, Inc. beat our consensus estimate by 11.66%, and for the current fiscal year, ZBH is expected to post earnings of $6.78 per share on revenue of $6.84 billion.

Shares of Zimmer Biomet Holdings, Inc. have gained 9.6% over the past month, and currently trade at a forward P/E of 16.69X and a P/CF of 8.98X.

The Medical - Products industry may rank in the bottom 56% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for LNTH and ZBH, even beyond their own solid fundamental situation.

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