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Veeco Instruments Inc. (VECO) Soars to 52-Week High, Time to Cash Out?
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Have you been paying attention to shares of Veeco Instruments (VECO - Free Report) ? Shares have been on the move with the stock up 2.1% over the past month. The stock hit a new 52-week high of $32.1 in the previous session. Veeco Instruments has gained 1.9% since the start of the year compared to the 56.6% move for the Zacks Computer and Technology sector and the 38.8% return for the Zacks Electronics - Manufacturing Machinery 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 November 6, 2023, Veeco reported EPS of $0.53 versus consensus estimate of $0.37.
For the current fiscal year, Veeco is expected to post earnings of $1.80 per share on $659.75 million in revenues.
Valuation Metrics
While Veeco has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? 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.
Veeco has a Value Score of C. 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 17.5X 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 17.6X versus its peer group's average of 17.6X. 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, Veeco 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 Veeco meets the list of requirements. Thus, it seems as though Veeco shares could have potential in the weeks and months to come.
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Veeco Instruments Inc. (VECO) Soars to 52-Week High, Time to Cash Out?
Have you been paying attention to shares of Veeco Instruments (VECO - Free Report) ? Shares have been on the move with the stock up 2.1% over the past month. The stock hit a new 52-week high of $32.1 in the previous session. Veeco Instruments has gained 1.9% since the start of the year compared to the 56.6% move for the Zacks Computer and Technology sector and the 38.8% return for the Zacks Electronics - Manufacturing Machinery 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 November 6, 2023, Veeco reported EPS of $0.53 versus consensus estimate of $0.37.
For the current fiscal year, Veeco is expected to post earnings of $1.80 per share on $659.75 million in revenues.
Valuation Metrics
While Veeco has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? 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.
Veeco has a Value Score of C. 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 17.5X 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 17.6X versus its peer group's average of 17.6X. 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, Veeco 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 Veeco meets the list of requirements. Thus, it seems as though Veeco shares could have potential in the weeks and months to come.