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Marcus & Millichap (MMI) Hits Fresh Highs: Is There Still Room to Run?
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Have you been paying attention to shares of Marcus & Millichap (MMI - Free Report) ? Shares have been on the move with the stock up 4.5% over the past month. MMI hit a new 52-week high of $37.98 in the previous session. Marcus & Millichap has gained 14.2% since the start of the year compared to the -0.8% move for the Finance sector and the -7.4% year-to-date return for its peer group.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on May 8, 2018, Marcus & Millichap reported EPS of $0.46 versus the Zacks Consensus Estimate of $0.38 while it beat the consensus revenue estimate by 17.62%.
For the current fiscal year, Marcus & Millichap is expected to post earnings of $1.99 per share on $730.6 million in revenues. This represents a 22.84% change in EPS on a 1.51% change in revenues. For the next fiscal year, the company is expected to earn $2.11 per share on $746.9 million in revenues. This represents a year-over-year change of 6.03% and 2.23%, respectively.
Valuation Metrics
Marcus & Millichap may be at a 52-week high right now, but what might the future hold for MMI? 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.
Marcus & Millichap 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 18.7X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 20.7X versus its peer group's average of 14.5X. Additionally, the stock has a PEG ratio of 3.12. 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, Marcus & Millichap 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 Marcus & Millichap passes the test. Thus, it seems as though MMI shares could still be poised for more gains ahead.
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Marcus & Millichap (MMI) Hits Fresh Highs: Is There Still Room to Run?
Have you been paying attention to shares of Marcus & Millichap (MMI - Free Report) ? Shares have been on the move with the stock up 4.5% over the past month. MMI hit a new 52-week high of $37.98 in the previous session. Marcus & Millichap has gained 14.2% since the start of the year compared to the -0.8% move for the Finance sector and the -7.4% year-to-date return for its peer group.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on May 8, 2018, Marcus & Millichap reported EPS of $0.46 versus the Zacks Consensus Estimate of $0.38 while it beat the consensus revenue estimate by 17.62%.
For the current fiscal year, Marcus & Millichap is expected to post earnings of $1.99 per share on $730.6 million in revenues. This represents a 22.84% change in EPS on a 1.51% change in revenues. For the next fiscal year, the company is expected to earn $2.11 per share on $746.9 million in revenues. This represents a year-over-year change of 6.03% and 2.23%, respectively.
Valuation Metrics
Marcus & Millichap may be at a 52-week high right now, but what might the future hold for MMI? 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.
Marcus & Millichap 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 18.7X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 20.7X versus its peer group's average of 14.5X. Additionally, the stock has a PEG ratio of 3.12. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Marcus & Millichap, Inc. Price and Consensus
Marcus & Millichap, Inc. Price and Consensus | Marcus & Millichap, Inc. Quote
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, Marcus & Millichap 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 Marcus & Millichap passes the test. Thus, it seems as though MMI shares could still be poised for more gains ahead.