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Old Dominion Freight Line (ODFL) Hits Fresh Highs: Is There Still Room to Run?
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Have you been paying attention to shares of Old Dominion Freight Line (ODFL - Free Report) ? Shares have been on the move with the stock up 15.5% over the past month. ODFL hit a new 52-week high of $154.14 in the previous session. Old Dominion Freight Line has gained 16.7% since the start of the year compared to the 0.2% move for the Transportation sector and the 7.1% 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, Old Dominion Freight Line reported EPS of $1.33 versus the Zacks Consensus Estimate of $1.3 while it beat the consensus revenue estimate by 0.15%.
For the current fiscal year, Old Dominion Freight Line is expected to post earnings of $6.4 per share on $3.93 billion in revenues. This represents a 46.79% change in EPS on a 17.14% change in revenues. For the next fiscal year, the company is expected to earn $7.2 per share on $4.27 billion in revenues. This represents a year-over-year change of 12.43% and 8.63%, respectively.
Valuation Metrics
While ODFL 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.
Old Dominion Freight Line has a Value Score of C. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 24X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 22.4X versus its peer group's average of 10.1X. Additionally, the stock has a PEG ratio of 1.03. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Old Dominion Freight Line, Inc. Price and Consensus
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Old Dominion Freight Line 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 Old Dominion Freight Line meets the list of requirements. Thus, it seems as though ODFL shares could have potential in the weeks and months to come.
How Does Old Dominion Freight Line Stack Up to the Competition?
Shares of Old Dominion Freight Line 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 solid potential picks, including Saia (SAIA - Free Report) , Landstar System (LSTR - Free Report) , and Herc Holdings (HRI - 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 ODFL, even beyond its own solid fundamental situation.
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Old Dominion Freight Line (ODFL) Hits Fresh Highs: Is There Still Room to Run?
Have you been paying attention to shares of Old Dominion Freight Line (ODFL - Free Report) ? Shares have been on the move with the stock up 15.5% over the past month. ODFL hit a new 52-week high of $154.14 in the previous session. Old Dominion Freight Line has gained 16.7% since the start of the year compared to the 0.2% move for the Transportation sector and the 7.1% 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, Old Dominion Freight Line reported EPS of $1.33 versus the Zacks Consensus Estimate of $1.3 while it beat the consensus revenue estimate by 0.15%.
For the current fiscal year, Old Dominion Freight Line is expected to post earnings of $6.4 per share on $3.93 billion in revenues. This represents a 46.79% change in EPS on a 17.14% change in revenues. For the next fiscal year, the company is expected to earn $7.2 per share on $4.27 billion in revenues. This represents a year-over-year change of 12.43% and 8.63%, respectively.
Valuation Metrics
While ODFL 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.
Old Dominion Freight Line has a Value Score of C. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 24X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 22.4X versus its peer group's average of 10.1X. Additionally, the stock has a PEG ratio of 1.03. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Old Dominion Freight Line, Inc. Price and Consensus
Old Dominion Freight Line, Inc. Price and Consensus | Old Dominion Freight Line, 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, Old Dominion Freight Line 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 Old Dominion Freight Line meets the list of requirements. Thus, it seems as though ODFL shares could have potential in the weeks and months to come.
How Does Old Dominion Freight Line Stack Up to the Competition?
Shares of Old Dominion Freight Line 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 solid potential picks, including Saia (SAIA - Free Report) , Landstar System (LSTR - Free Report) , and Herc Holdings (HRI - 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 ODFL, even beyond its own solid fundamental situation.