Have you been paying attention to shares of Rocky Brands (RCKY - Free Report) ? Shares have been on the move with the stock up 13% over the past month. RCKY hit a new 52-week high of $27.95 in the previous session. Rocky Brands has gained 44.4% since the start of the year compared to the 2.3% move for the Consumer Discretionary sector and the 12.3% 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 24, 2018, Rocky Brands reported EPS of $0.44 versus the Zacks Consensus Estimate of $0.25 while it missed the consensus revenue estimate by 0.35%.
For the current fiscal year, Rocky Brands is expected to post earnings of $1.5 per share on $246.9 million in revenues. This represents a 29.31% change in EPS on a -2.49% change in revenues. For the next fiscal year, the company is expected to earn $1.65 per share on $254.5 million in revenues. This represents a year-over-year change of 10% and 3.08%, respectively.
Rocky Brands may be at a 52-week high right now, but what might the future hold for RCKY? 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 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.
Rocky Brands has a Value Score of B. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 18.2X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 13.4X versus its peer group's average of 14.8X. 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, Rocky Brands currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 or 2 (Buy) and Style Scores of A or B, it looks as if Rocky Brands passes the test. Thus, it seems as though RCKY shares could have potential in the weeks and months to come.
How Does Rocky Brands Stack Up to the Competition?
Shares of Rocky Brands have been rising, 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 looking good, including Iconix Brand Group , Xtep International Holdings , and PVH (PVH - 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 24% of all the industries we have in our universe, so it looks like there are some nice tailwinds for RCKY, even beyond its own solid fundamental situation.