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FirstCash Holdings, Inc. (FCFS) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of FirstCash Holdings (FCFS - Free Report) ? Shares have been on the move with the stock up 3.5% over the past month. The stock hit a new 52-week high of $113.24 in the previous session. FirstCash Holdings has gained 29.9% since the start of the year compared to the 17.3% move for the Zacks Business Services sector and the 18.4% return for the Zacks Financial Transaction Services 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 October 26, 2023, FirstCash reported EPS of $1.56 versus consensus estimate of $1.4 while it beat the consensus revenue estimate by 2.51%.
For the current fiscal year, FirstCash is expected to post earnings of $5.86 per share on $3.16 billion in revenues. This represents a 13.1% change in EPS on a 15.75% change in revenues. For the next fiscal year, the company is expected to earn $7.14 per share on $3.4 billion in revenues. This represents a year-over-year change of 21.81% and 7.76%, respectively.
Valuation Metrics
FirstCash 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.
FirstCash has a Value Score of B. The stock's Growth and Momentum Scores are C and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 19.3X current fiscal year EPS estimates, which is a premium to the peer industry average of 13.7X. On a trailing cash flow basis, the stock currently trades at 7X versus its peer group's average of 9.9X. 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, FirstCash 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 FirstCash fits the bill. Thus, it seems as though FirstCash shares could still be poised for more gains ahead.
How Does FCFS Stack Up to the Competition?
Shares of FCFS 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 Shift4 Payments, Inc. (FOUR - Free Report) . FOUR has a Zacks Rank of # 1 (Strong Buy) and a Value Score of D, a Growth Score of A, and a Momentum Score of D.
Earnings were strong last quarter. Shift4 Payments, Inc. beat our consensus estimate by 17.14%, and for the current fiscal year, FOUR is expected to post earnings of $3.76 per share on revenue of $951.77 million.
Shares of Shift4 Payments, Inc. have gained 39.4% over the past month, and currently trade at a forward P/E of 23.12X and a P/CF of 26.53X.
The Financial Transaction Services industry may rank in the bottom 61% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for FCFS and FOUR, even beyond their own solid fundamental situation.
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FirstCash Holdings, Inc. (FCFS) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of FirstCash Holdings (FCFS - Free Report) ? Shares have been on the move with the stock up 3.5% over the past month. The stock hit a new 52-week high of $113.24 in the previous session. FirstCash Holdings has gained 29.9% since the start of the year compared to the 17.3% move for the Zacks Business Services sector and the 18.4% return for the Zacks Financial Transaction Services 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 October 26, 2023, FirstCash reported EPS of $1.56 versus consensus estimate of $1.4 while it beat the consensus revenue estimate by 2.51%.
For the current fiscal year, FirstCash is expected to post earnings of $5.86 per share on $3.16 billion in revenues. This represents a 13.1% change in EPS on a 15.75% change in revenues. For the next fiscal year, the company is expected to earn $7.14 per share on $3.4 billion in revenues. This represents a year-over-year change of 21.81% and 7.76%, respectively.
Valuation Metrics
FirstCash 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.
FirstCash has a Value Score of B. The stock's Growth and Momentum Scores are C and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 19.3X current fiscal year EPS estimates, which is a premium to the peer industry average of 13.7X. On a trailing cash flow basis, the stock currently trades at 7X versus its peer group's average of 9.9X. 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, FirstCash 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 FirstCash fits the bill. Thus, it seems as though FirstCash shares could still be poised for more gains ahead.
How Does FCFS Stack Up to the Competition?
Shares of FCFS 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 Shift4 Payments, Inc. (FOUR - Free Report) . FOUR has a Zacks Rank of # 1 (Strong Buy) and a Value Score of D, a Growth Score of A, and a Momentum Score of D.
Earnings were strong last quarter. Shift4 Payments, Inc. beat our consensus estimate by 17.14%, and for the current fiscal year, FOUR is expected to post earnings of $3.76 per share on revenue of $951.77 million.
Shares of Shift4 Payments, Inc. have gained 39.4% over the past month, and currently trade at a forward P/E of 23.12X and a P/CF of 26.53X.
The Financial Transaction Services industry may rank in the bottom 61% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for FCFS and FOUR, even beyond their own solid fundamental situation.