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Ambac Financial Group, Inc. (AMBC) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of Ambac Financial Group (AMBC - Free Report) ? Shares have been on the move with the stock up 22.5% over the past month. The stock hit a new 52-week high of $18.45 in the previous session. Ambac Financial Group has gained 11.2% since the start of the year compared to the 2.7% move for the Zacks Finance sector and the 14.2% return for the Zacks Insurance - Property and Casualty 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 May 6, 2024, Ambac reported EPS of $0.82 versus consensus estimate of $0.21.
Valuation Metrics
While Ambac 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. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Ambac has a Value Score of B. 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 12.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 12.8X. On a trailing cash flow basis, the stock currently trades at 7.6X versus its peer group's average of 13.4X. 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, Ambac 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 Ambac fits the bill. Thus, it seems as though Ambac shares could still be poised for more gains ahead.
How Does AMBC Stack Up to the Competition?
Shares of AMBC 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 The Allstate Corporation (ALL - Free Report) . ALL has a Zacks Rank of # 1 (Strong Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of A.
Earnings were strong last quarter. The Allstate Corporation beat our consensus estimate by 24.82%, and for the current fiscal year, ALL is expected to post earnings of $14.82 per share on revenue of $63.21 billion.
Shares of The Allstate Corporation have gained 0.3% over the past month, and currently trade at a forward P/E of 11.49X and a P/CF of 41.15X.
The Insurance - Property and Casualty industry is in the top 20% of all the industries we have in our universe, so it looks like there are some nice tailwinds for AMBC and ALL, even beyond their own solid fundamental situation.
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Ambac Financial Group, Inc. (AMBC) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Ambac Financial Group (AMBC - Free Report) ? Shares have been on the move with the stock up 22.5% over the past month. The stock hit a new 52-week high of $18.45 in the previous session. Ambac Financial Group has gained 11.2% since the start of the year compared to the 2.7% move for the Zacks Finance sector and the 14.2% return for the Zacks Insurance - Property and Casualty 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 May 6, 2024, Ambac reported EPS of $0.82 versus consensus estimate of $0.21.
Valuation Metrics
While Ambac 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. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Ambac has a Value Score of B. 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 12.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 12.8X. On a trailing cash flow basis, the stock currently trades at 7.6X versus its peer group's average of 13.4X. 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, Ambac 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 Ambac fits the bill. Thus, it seems as though Ambac shares could still be poised for more gains ahead.
How Does AMBC Stack Up to the Competition?
Shares of AMBC 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 The Allstate Corporation (ALL - Free Report) . ALL has a Zacks Rank of # 1 (Strong Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of A.
Earnings were strong last quarter. The Allstate Corporation beat our consensus estimate by 24.82%, and for the current fiscal year, ALL is expected to post earnings of $14.82 per share on revenue of $63.21 billion.
Shares of The Allstate Corporation have gained 0.3% over the past month, and currently trade at a forward P/E of 11.49X and a P/CF of 41.15X.
The Insurance - Property and Casualty industry is in the top 20% of all the industries we have in our universe, so it looks like there are some nice tailwinds for AMBC and ALL, even beyond their own solid fundamental situation.