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AssetMark Financial Holdings, Inc. (AMK) Hit a 52 Week High, Can the Run Continue?

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Shares of AssetMark Financial (AMK - Free Report) have been strong performers lately, with the stock up 16.2% over the past month. The stock hit a new 52-week high of $30.98 in the previous session. AssetMark Financial has gained 33.8% since the start of the year compared to the 4.9% move for the Zacks Finance sector and the 6.6% return for the Zacks Financial - Investment Management 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 22, 2023, AssetMark Financial reported EPS of $0.46 versus consensus estimate of $0.44 while it beat the consensus revenue estimate by 2.65%.

For the current fiscal year, AssetMark Financial is expected to post earnings of $2.20 per share on $728.89 million in revenues. This represents a 24.29% change in EPS on a 17.88% change in revenues. For the next fiscal year, the company is expected to earn $2.34 per share on $762.2 million in revenues. This represents a year-over-year change of 6.25% and 4.57%, respectively.

Valuation Metrics

AssetMark Financial 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 has run ahead of itself.

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.

AssetMark Financial has a Value Score of D. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 14X current fiscal year EPS estimates, which is a premium to the peer industry average of 11.1X. On a trailing cash flow basis, the stock currently trades at 25.5X versus its peer group's average of 7.7X. 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 look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, AssetMark Financial 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 AssetMark Financial meets the list of requirements. Thus, it seems as though AssetMark Financial shares could have potential in the weeks and months to come.

How Does AMK Stack Up to the Competition?

Shares of AMK 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 Federated Hermes, Inc. (FHI - Free Report) . FHI 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. Federated Hermes, Inc. beat our consensus estimate by 20%, and for the current fiscal year, FHI is expected to post earnings of $3.22 per share on revenue of $1.57 billion.

Shares of Federated Hermes, Inc. have gained 1.5% over the past month, and currently trade at a forward P/E of 12.11X and a P/CF of 11.73X.

The Financial - Investment Management industry is in the top 19% of all the industries we have in our universe, so it looks like there are some nice tailwinds for AMK and FHI, even beyond their own solid fundamental situation.

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