Have you been paying attention to shares of Columbia Sportswear Company (COLM - Free Report) ? Shares have been on the move with the stock up 4.1% over the past month. COLM hit a new 52-week high of $80.87 in the previous session. Columbia Sportswear has gained 12.3% since the start of the year compared to the 0% move for the Consumer Discretionary sector and the 8.2% year-to-date return for its peer group.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on February 8, 2018, Columbia Sportswear reported EPS of $1.31 versus the Zacks Consensus Estimate of $1.11 while it beat the consensus revenue estimate by 1.88%.
For the current fiscal year, Columbia Sportswear is expected to post earnings of $3.25 per share on $2.62 billion in revenues. This represents a 9.06% change in EPS on a 6.12% change in revenues. For the next fiscal year, the company is expected to earn $3.58 per share on $2.77 billion in revenues. This represents a year-over-year change of 10.19% and 6.03%, respectively.
While COLM 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.
Columbia Sportswear has a Value Score of C. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 24.8X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 20.9X versus its peer group's average of 12.4X. Additionally, the stock has a PEG ratio of 2.59. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Columbia Sportswear 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 and Style Scores of A or B, it looks as if Columbia Sportswear meets the list of requirements. Thus, it seems as though COLM shares could have potential in the weeks and months to come.