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Vertex, Inc. (VERX) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Vertex (VERX - Free Report) ? Shares have been on the move with the stock up 28.9% over the past month. The stock hit a new 52-week high of $55.52 in the previous session. Vertex has gained 104.7% since the start of the year compared to the 29.2% move for the Zacks Computer and Technology sector and the 34.2% return for the Zacks Internet - Software 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, 2024, Vertex reported EPS of $0.16 versus consensus estimate of $0.14.
For the current fiscal year, Vertex is expected to post earnings of $0.62 per share on $664.94 million in revenues. This represents a 58.97% change in EPS on a 16.17% change in revenues. For the next fiscal year, the company is expected to earn $0.71 per share on $763.22 million in revenues. This represents a year-over-year change of 14.52% and 14.78%, respectively.
Valuation Metrics
Vertex 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.
Vertex has a Value Score of F. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 89X current fiscal year EPS estimates, which is a premium to the peer industry average of 32.6X. On a trailing cash flow basis, the stock currently trades at 74.9X versus its peer group's average of 27.6X. Additionally, the stock has a PEG ratio of 6.34. 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, Vertex 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 Vertex meets the list of requirements. Thus, it seems as though Vertex shares could have potential in the weeks and months to come.
How Does VERX Stack Up to the Competition?
Shares of VERX 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 eGain Corporation (EGAN - Free Report) . EGAN has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of C, and a Momentum Score of C.
Earnings were strong last quarter. eGain Corporation beat our consensus estimate by 300%, and for the current fiscal year, EGAN is expected to post earnings of $0.23 per share on revenue of $92.13 million.
Shares of eGain Corporation have gained 1.8% over the past month, and currently trade at a forward P/E of 22.78X and a P/CF of 14.52X.
The Internet - Software industry is in the top 14% of all the industries we have in our universe, so it looks like there are some nice tailwinds for VERX and EGAN, even beyond their own solid fundamental situation.
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Vertex, Inc. (VERX) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Vertex (VERX - Free Report) ? Shares have been on the move with the stock up 28.9% over the past month. The stock hit a new 52-week high of $55.52 in the previous session. Vertex has gained 104.7% since the start of the year compared to the 29.2% move for the Zacks Computer and Technology sector and the 34.2% return for the Zacks Internet - Software 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, 2024, Vertex reported EPS of $0.16 versus consensus estimate of $0.14.
For the current fiscal year, Vertex is expected to post earnings of $0.62 per share on $664.94 million in revenues. This represents a 58.97% change in EPS on a 16.17% change in revenues. For the next fiscal year, the company is expected to earn $0.71 per share on $763.22 million in revenues. This represents a year-over-year change of 14.52% and 14.78%, respectively.
Valuation Metrics
Vertex 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.
Vertex has a Value Score of F. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 89X current fiscal year EPS estimates, which is a premium to the peer industry average of 32.6X. On a trailing cash flow basis, the stock currently trades at 74.9X versus its peer group's average of 27.6X. Additionally, the stock has a PEG ratio of 6.34. 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, Vertex 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 Vertex meets the list of requirements. Thus, it seems as though Vertex shares could have potential in the weeks and months to come.
How Does VERX Stack Up to the Competition?
Shares of VERX 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 eGain Corporation (EGAN - Free Report) . EGAN has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of C, and a Momentum Score of C.
Earnings were strong last quarter. eGain Corporation beat our consensus estimate by 300%, and for the current fiscal year, EGAN is expected to post earnings of $0.23 per share on revenue of $92.13 million.
Shares of eGain Corporation have gained 1.8% over the past month, and currently trade at a forward P/E of 22.78X and a P/CF of 14.52X.
The Internet - Software industry is in the top 14% of all the industries we have in our universe, so it looks like there are some nice tailwinds for VERX and EGAN, even beyond their own solid fundamental situation.