Have you been paying attention to shares of Regional Management (RM Quick QuoteRM - Free Report) ? Shares have been on the move with the stock up 10.3% over the past month. The stock hit a new 52-week high of $37.52 in the previous session. Regional Management has gained 6.4% since the start of the year compared to the 6.6% move for the Zacks Finance sector and the 14.2% return for the Zacks Financial - Consumer Loans 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 February 5, 2025, Regional Management reported EPS of $0.98 versus consensus estimate of $0.88.

For the current fiscal year, Regional Management is expected to post earnings of $5.29 per share on $625.35 million in revenues. This represents a 27.78% change in EPS on a 6.26% change in revenues. For the next fiscal year, the company is expected to earn $6.77 per share on $673.86 million in revenues. This represents a year-over-year change of 28.04% and 7.76%, respectively.

Valuation Metrics

Regional Management 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 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.

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

In terms of its value breakdown, the stock currently trades at 6.8X current fiscal year EPS estimates, which is not in-line with the peer industry average of 10.6X. On a trailing cash flow basis, the stock currently trades at 12.5X versus its peer group's average of 11.2X. 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, Regional Management 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 Regional Management meets the list of requirements. Thus, it seems as though Regional Management shares could still be poised for more gains ahead.

How Does RM Stack Up to the Competition?

Shares of RM 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 Discover Financial Services . DFS has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of C, and a Momentum Score of A.

Earnings were strong last quarter. Discover Financial Services beat our consensus estimate by 61.20%, and for the current fiscal year, DFS is expected to post earnings of $13.57 per share on revenue of $17.15 billion.

Shares of Discover Financial Services have gained 15.3% over the past month, and currently trade at a forward P/E of 14.94X and a P/CF of 17.3X.

The Financial - Consumer Loans industry is in the top 32% of all the industries we have in our universe, so it looks like there are some nice tailwinds for RM and DFS, even beyond their own solid fundamental situation.