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CECO Environmental Corp. (CECO) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of CECO Environmental (CECO - Free Report) ? Shares have been on the move with the stock up 6.7% over the past month. The stock hit a new 52-week high of $15.19 in the previous session. CECO Environmental has gained 25.6% since the start of the year compared to the 7.2% move for the Zacks Industrial Products sector and the 5.7% return for the Zacks Pollution Control 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 November 7, 2022, CECO reported EPS of $0.2 versus consensus estimate of $0.14.
For the current fiscal year, CECO is expected to post earnings of $0.94 per share on $410.15 million in revenues.
Valuation Metrics
While CECO has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? 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.
CECO has a Value Score of B. 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 15.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 21.1X. On a trailing cash flow basis, the stock currently trades at 26.2X versus its peer group's average of 16.9X. Additionally, the stock has a PEG ratio of 1.04. 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 look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, CECO 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 CECO passes the test. Thus, it seems as though CECO shares could still be poised for more gains ahead.
How Does CECO Stack Up to the Competition?
Shares of CECO 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 Donaldson Company, Inc. (DCI - Free Report) . DCI has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of F.
Earnings were strong last quarter. Donaldson Company, Inc. beat our consensus estimate by 7.14%, and for the current fiscal year, DCI is expected to post earnings of $3 per share on revenue of $3.44 billion.
Shares of Donaldson Company, Inc. have gained 4.2% over the past month, and currently trade at a forward P/E of 21.1X and a P/CF of 18.1X.
The Pollution Control industry is in the top 15% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CECO and DCI, even beyond their own solid fundamental situation.
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CECO Environmental Corp. (CECO) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of CECO Environmental (CECO - Free Report) ? Shares have been on the move with the stock up 6.7% over the past month. The stock hit a new 52-week high of $15.19 in the previous session. CECO Environmental has gained 25.6% since the start of the year compared to the 7.2% move for the Zacks Industrial Products sector and the 5.7% return for the Zacks Pollution Control 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 November 7, 2022, CECO reported EPS of $0.2 versus consensus estimate of $0.14.
For the current fiscal year, CECO is expected to post earnings of $0.94 per share on $410.15 million in revenues.
Valuation Metrics
While CECO has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? 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.
CECO has a Value Score of B. 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 15.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 21.1X. On a trailing cash flow basis, the stock currently trades at 26.2X versus its peer group's average of 16.9X. Additionally, the stock has a PEG ratio of 1.04. 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 look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, CECO 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 CECO passes the test. Thus, it seems as though CECO shares could still be poised for more gains ahead.
How Does CECO Stack Up to the Competition?
Shares of CECO 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 Donaldson Company, Inc. (DCI - Free Report) . DCI has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of F.
Earnings were strong last quarter. Donaldson Company, Inc. beat our consensus estimate by 7.14%, and for the current fiscal year, DCI is expected to post earnings of $3 per share on revenue of $3.44 billion.
Shares of Donaldson Company, Inc. have gained 4.2% over the past month, and currently trade at a forward P/E of 21.1X and a P/CF of 18.1X.
The Pollution Control industry is in the top 15% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CECO and DCI, even beyond their own solid fundamental situation.