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Weave Communications, Inc. (WEAV) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Weave Communications, Inc. (WEAV - Free Report) ? Shares have been on the move with the stock up 58.7% over the past month. The stock hit a new 52-week high of $7.19 in the previous session. Weave Communications, Inc. has gained 55.9% since the start of the year compared to the 27.1% move for the Zacks Computer and Technology sector and the -26.9% return for the Zacks Communication - Network Software 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 May 3, 2023, Weave Communications, Inc. reported EPS of $-0.05 versus consensus estimate of $-0.08.
For the current fiscal year, Weave Communications, Inc. is expected to post earnings of -$0.25 per share on $162.18 million in revenues. This represents a 47.92% change in EPS on a 14.12% change in revenues. For the next fiscal year, the company is expected to earn -$0.16 per share on $183.11 million in revenues. This represents a year-over-year change of 37.6% and 12.91%, respectively.
Valuation Metrics
Weave Communications, 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Weave Communications, Inc. has a Value Score of D. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Weave Communications, Inc. 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 Weave Communications, Inc. passes the test. Thus, it seems as though Weave Communications, Inc. shares could have a bit more room to run in the near term.
How Does WEAV Stack Up to the Competition?
Shares of WEAV 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 Ribbon Communications Inc. (RBBN - Free Report) . RBBN has a Zacks Rank of # 1 (Strong Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of F.
Earnings were strong last quarter. Ribbon Communications Inc. beat our consensus estimate by 60%, and for the current fiscal year, RBBN is expected to post earnings of $0.27 per share on revenue of $859.16 million.
Shares of Ribbon Communications Inc. have gained 11.4% over the past month, and currently trade at a forward P/E of 10.48X and a P/CF of 5.85X.
The Communication - Network Software 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 WEAV and RBBN, even beyond their own solid fundamental situation.
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Weave Communications, Inc. (WEAV) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Weave Communications, Inc. (WEAV - Free Report) ? Shares have been on the move with the stock up 58.7% over the past month. The stock hit a new 52-week high of $7.19 in the previous session. Weave Communications, Inc. has gained 55.9% since the start of the year compared to the 27.1% move for the Zacks Computer and Technology sector and the -26.9% return for the Zacks Communication - Network Software 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 May 3, 2023, Weave Communications, Inc. reported EPS of $-0.05 versus consensus estimate of $-0.08.
For the current fiscal year, Weave Communications, Inc. is expected to post earnings of -$0.25 per share on $162.18 million in revenues. This represents a 47.92% change in EPS on a 14.12% change in revenues. For the next fiscal year, the company is expected to earn -$0.16 per share on $183.11 million in revenues. This represents a year-over-year change of 37.6% and 12.91%, respectively.
Valuation Metrics
Weave Communications, 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Weave Communications, Inc. has a Value Score of D. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Weave Communications, Inc. 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 Weave Communications, Inc. passes the test. Thus, it seems as though Weave Communications, Inc. shares could have a bit more room to run in the near term.
How Does WEAV Stack Up to the Competition?
Shares of WEAV 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 Ribbon Communications Inc. (RBBN - Free Report) . RBBN has a Zacks Rank of # 1 (Strong Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of F.
Earnings were strong last quarter. Ribbon Communications Inc. beat our consensus estimate by 60%, and for the current fiscal year, RBBN is expected to post earnings of $0.27 per share on revenue of $859.16 million.
Shares of Ribbon Communications Inc. have gained 11.4% over the past month, and currently trade at a forward P/E of 10.48X and a P/CF of 5.85X.
The Communication - Network Software 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 WEAV and RBBN, even beyond their own solid fundamental situation.