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Solo Brands, Inc. (DTC) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of Solo Brands, Inc. (DTC - Free Report) ? Shares have been on the move with the stock up 104.3% over the past month. The stock hit a new 52-week high of $8.03 in the previous session. Solo Brands, Inc. has gained 115.3% since the start of the year compared to the 8.3% move for the Zacks Retail-Wholesale sector and the 17.5% return for the Zacks Internet - Commerce 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 March 9, 2023, Solo Brands, Inc. reported EPS of $0.33 versus consensus estimate of $0.23 while it beat the consensus revenue estimate by 28.32%.
For the current fiscal year, Solo Brands, Inc. is expected to post earnings of $0.97 per share on $534.04 million in revenues. This represents a -9.35% change in EPS on a 3.17% change in revenues. For the next fiscal year, the company is expected to earn $1.19 per share on $590.37 million in revenues. This represents a year-over-year change of 22.94% and 10.55%, respectively.
Valuation Metrics
Solo Brands, Inc. 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.
Solo Brands, Inc. has a Value Score of B. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 8.3X current fiscal year EPS estimates, which is not in-line with the peer industry average of 20.8X. On a trailing cash flow basis, the stock currently trades at 10.1X versus its peer group's average of 11.6X. Additionally, the stock has a PEG ratio of 0.48. 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, Solo Brands, Inc. 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 Solo Brands, Inc. fits the bill. Thus, it seems as though Solo Brands, Inc. shares could have potential in the weeks and months to come.
How Does DTC Stack Up to the Competition?
Shares of DTC 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 Booking Holdings Inc. (BKNG - Free Report) . BKNG has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of B.
Earnings were strong last quarter. Booking Holdings Inc. beat our consensus estimate by 17.98%, and for the current fiscal year, BKNG is expected to post earnings of $127.02 per share on revenue of $19.71 billion.
Shares of Booking Holdings Inc. have gained 2.3% over the past month, and currently trade at a forward P/E of 20.77X and a P/CF of 23X.
The Internet - Commerce industry is in the top 37% of all the industries we have in our universe, so it looks like there are some nice tailwinds for DTC and BKNG, even beyond their own solid fundamental situation.
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Solo Brands, Inc. (DTC) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Solo Brands, Inc. (DTC - Free Report) ? Shares have been on the move with the stock up 104.3% over the past month. The stock hit a new 52-week high of $8.03 in the previous session. Solo Brands, Inc. has gained 115.3% since the start of the year compared to the 8.3% move for the Zacks Retail-Wholesale sector and the 17.5% return for the Zacks Internet - Commerce 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 March 9, 2023, Solo Brands, Inc. reported EPS of $0.33 versus consensus estimate of $0.23 while it beat the consensus revenue estimate by 28.32%.
For the current fiscal year, Solo Brands, Inc. is expected to post earnings of $0.97 per share on $534.04 million in revenues. This represents a -9.35% change in EPS on a 3.17% change in revenues. For the next fiscal year, the company is expected to earn $1.19 per share on $590.37 million in revenues. This represents a year-over-year change of 22.94% and 10.55%, respectively.
Valuation Metrics
Solo Brands, Inc. 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.
Solo Brands, Inc. has a Value Score of B. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 8.3X current fiscal year EPS estimates, which is not in-line with the peer industry average of 20.8X. On a trailing cash flow basis, the stock currently trades at 10.1X versus its peer group's average of 11.6X. Additionally, the stock has a PEG ratio of 0.48. 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, Solo Brands, Inc. 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 Solo Brands, Inc. fits the bill. Thus, it seems as though Solo Brands, Inc. shares could have potential in the weeks and months to come.
How Does DTC Stack Up to the Competition?
Shares of DTC 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 Booking Holdings Inc. (BKNG - Free Report) . BKNG has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of B.
Earnings were strong last quarter. Booking Holdings Inc. beat our consensus estimate by 17.98%, and for the current fiscal year, BKNG is expected to post earnings of $127.02 per share on revenue of $19.71 billion.
Shares of Booking Holdings Inc. have gained 2.3% over the past month, and currently trade at a forward P/E of 20.77X and a P/CF of 23X.
The Internet - Commerce industry is in the top 37% of all the industries we have in our universe, so it looks like there are some nice tailwinds for DTC and BKNG, even beyond their own solid fundamental situation.