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SPX Technologies, Inc. (SPXC) Soars to 52-Week High, Time to Cash Out?

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Have you been paying attention to shares of SPX Technologies (SPXC - Free Report) ? Shares have been on the move with the stock up 2.3% over the past month. The stock hit a new 52-week high of $104.26 in the previous session. SPX Technologies has gained 2.3% since the start of the year compared to the 23% move for the Zacks Business Services sector and the 47.8% return for the Zacks Technology 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 November 2, 2023, SPX Technologies reported EPS of $1.06 versus consensus estimate of $0.95.

For the current fiscal year, SPX Technologies is expected to post earnings of $4.77 per share on $1.75 billion in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $5.35 per share on $1.88 billion in revenues. This represents a year-over-year change of 11.01% and 7.44%, respectively.

Valuation Metrics

SPX Technologies 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 these give investors a variety of ways to comb 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.

SPX Technologies has a Value Score of B. The stock's Growth and Momentum Scores are B and D, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 21.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 24.5X. On a trailing cash flow basis, the stock currently trades at 23X versus its peer group's average of 8.4X. Additionally, the stock has a PEG ratio of 1.2. 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, SPX Technologies 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 SPX Technologies passes the test. Thus, it seems as though SPX Technologies shares could have a bit more room to run in the near term.

How Does SPXC Stack Up to the Competition?

Shares of SPXC 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 GigaCloud Technology Inc. (GCT - Free Report) . GCT has a Zacks Rank of # 1 (Strong Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of D.

Earnings were strong last quarter. GigaCloud Technology Inc. beat our consensus estimate by 55.26%, and for the current fiscal year, GCT is expected to post earnings of $2.23 per share on revenue of $679.4 million.

Shares of GigaCloud Technology Inc. have gained 40% over the past month, and currently trade at a forward P/E of 11.49X and a P/CF of 41.1X.

The Technology Services 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 SPXC and GCT, even beyond their own solid fundamental situation.


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