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SVB Financial (SIVB) Hits Fresh Highs: Is There Still Room to Run?
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Have you been paying attention to shares of SVB Financial Group ? Shares have been on the move with the stock up 29.2% over the past month. SIVB hit a new 52-week high of $325.93 in the previous session. SVB Financial Group has gained 37.6% since the start of the year compared to the -1.2% move for the Finance sector and the 12.5% 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 April 26, 2018, SVB Financial Group reported EPS of $3.63 versus the Zacks Consensus Estimate of $3.13 while it beat the consensus revenue estimate by 7.43%.
For the current fiscal year, SVB Financial Group is expected to post earnings of $15.91 per share on $2.49 billion in revenues. This represents a 60.54% change in EPS on a 25.93% change in revenues. For the next fiscal year, the company is expected to earn $19.22 per share on $2.91 billion in revenues. This represents a year-over-year change of 20.94% and 17.04%, respectively.
Valuation Metrics
SVB Financial Group may be at a 52-week high right now, but what might the future hold for SIVB? 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.
SVB Financial Group has a Value Score of D. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 20.2X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 35.8X versus its peer group's average of 15.8X. Additionally, the stock has a PEG ratio of 1.84. 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, SVB Financial Group 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 SVB Financial Group passes the test. Thus, it seems as though SIVB shares could have a bit more room to run in the near term.
How Does SVB Financial Group Stack Up to the Competition?
Shares of SVB Financial Group have been moving higher, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also impressive, including First Financial Northwest (FFNW - Free Report) , Nicolet Bankshares , and Cullen/Frost Bankers (CFR - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 42% of all the industries we have in our universe, so it looks like there are some nice tailwinds for SIVB, even beyond its own solid fundamental situation.
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SVB Financial (SIVB) Hits Fresh Highs: Is There Still Room to Run?
Have you been paying attention to shares of SVB Financial Group ? Shares have been on the move with the stock up 29.2% over the past month. SIVB hit a new 52-week high of $325.93 in the previous session. SVB Financial Group has gained 37.6% since the start of the year compared to the -1.2% move for the Finance sector and the 12.5% 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 April 26, 2018, SVB Financial Group reported EPS of $3.63 versus the Zacks Consensus Estimate of $3.13 while it beat the consensus revenue estimate by 7.43%.
For the current fiscal year, SVB Financial Group is expected to post earnings of $15.91 per share on $2.49 billion in revenues. This represents a 60.54% change in EPS on a 25.93% change in revenues. For the next fiscal year, the company is expected to earn $19.22 per share on $2.91 billion in revenues. This represents a year-over-year change of 20.94% and 17.04%, respectively.
Valuation Metrics
SVB Financial Group may be at a 52-week high right now, but what might the future hold for SIVB? 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.
SVB Financial Group has a Value Score of D. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 20.2X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 35.8X versus its peer group's average of 15.8X. Additionally, the stock has a PEG ratio of 1.84. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
SVB Financial Group Price and Consensus
SVB Financial Group Price and Consensus | SVB Financial Group 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, SVB Financial Group 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 SVB Financial Group passes the test. Thus, it seems as though SIVB shares could have a bit more room to run in the near term.
How Does SVB Financial Group Stack Up to the Competition?
Shares of SVB Financial Group have been moving higher, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also impressive, including First Financial Northwest (FFNW - Free Report) , Nicolet Bankshares , and Cullen/Frost Bankers (CFR - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 42% of all the industries we have in our universe, so it looks like there are some nice tailwinds for SIVB, even beyond its own solid fundamental situation.