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Carrols Restaurant Group, Inc. (TAST) Soars to 52-Week High, Time to Cash Out?
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Have you been paying attention to shares of Carrols Restaurant Group (TAST - Free Report) ? Shares have been on the move with the stock up 42.1% over the past month. The stock hit a new 52-week high of $8.05 in the previous session. Carrols Restaurant Group has gained 458.1% since the start of the year compared to the 17.6% move for the Zacks Retail-Wholesale sector and the 5.1% return for the Zacks Retail - Restaurants 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 November 9, 2023, Carrols Restaurant reported EPS of $0.16 versus consensus estimate of $0.07.
For the current fiscal year, Carrols Restaurant is expected to post earnings of $0.42 per share on $1.87 billion in revenues. This represents a 160% change in EPS on an 8.11% change in revenues. For the next fiscal year, the company is expected to earn $0.45 per share on $1.93 billion in revenues. This represents a year-over-year change of 7.14% and 2.93%, respectively.
Valuation Metrics
Carrols Restaurant 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Carrols Restaurant has a Value Score of A. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 18.1X current fiscal year EPS estimates, which is not in-line with the peer industry average of 19.8X. On a trailing cash flow basis, the stock currently trades at 9.1X versus its peer group's average of 12.5X. 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, Carrols Restaurant 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 Carrols Restaurant fits the bill. Thus, it seems as though Carrols Restaurant shares could have potential in the weeks and months to come.
How Does TAST Stack Up to the Competition?
Shares of TAST 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 Shake Shack, Inc. (SHAK - Free Report) . SHAK has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. Shake Shack, Inc. beat our consensus estimate by 88.89%, and for the current fiscal year, SHAK is expected to post earnings of $0.44 per share on revenue of $1.08 billion.
Shares of Shake Shack, Inc. have gained 2.8% over the past month, and currently trade at a forward P/E of 166.46X and a P/CF of 37.15X.
The Retail - Restaurants industry is in the top 30% of all the industries we have in our universe, so it looks like there are some nice tailwinds for TAST and SHAK, even beyond their own solid fundamental situation.
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Carrols Restaurant Group, Inc. (TAST) Soars to 52-Week High, Time to Cash Out?
Have you been paying attention to shares of Carrols Restaurant Group (TAST - Free Report) ? Shares have been on the move with the stock up 42.1% over the past month. The stock hit a new 52-week high of $8.05 in the previous session. Carrols Restaurant Group has gained 458.1% since the start of the year compared to the 17.6% move for the Zacks Retail-Wholesale sector and the 5.1% return for the Zacks Retail - Restaurants 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 November 9, 2023, Carrols Restaurant reported EPS of $0.16 versus consensus estimate of $0.07.
For the current fiscal year, Carrols Restaurant is expected to post earnings of $0.42 per share on $1.87 billion in revenues. This represents a 160% change in EPS on an 8.11% change in revenues. For the next fiscal year, the company is expected to earn $0.45 per share on $1.93 billion in revenues. This represents a year-over-year change of 7.14% and 2.93%, respectively.
Valuation Metrics
Carrols Restaurant 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Carrols Restaurant has a Value Score of A. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 18.1X current fiscal year EPS estimates, which is not in-line with the peer industry average of 19.8X. On a trailing cash flow basis, the stock currently trades at 9.1X versus its peer group's average of 12.5X. 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, Carrols Restaurant 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 Carrols Restaurant fits the bill. Thus, it seems as though Carrols Restaurant shares could have potential in the weeks and months to come.
How Does TAST Stack Up to the Competition?
Shares of TAST 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 Shake Shack, Inc. (SHAK - Free Report) . SHAK has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. Shake Shack, Inc. beat our consensus estimate by 88.89%, and for the current fiscal year, SHAK is expected to post earnings of $0.44 per share on revenue of $1.08 billion.
Shares of Shake Shack, Inc. have gained 2.8% over the past month, and currently trade at a forward P/E of 166.46X and a P/CF of 37.15X.
The Retail - Restaurants industry is in the top 30% of all the industries we have in our universe, so it looks like there are some nice tailwinds for TAST and SHAK, even beyond their own solid fundamental situation.