Have you been paying attention to shares of Syntel ? Shares have been on the move with the stock up 7.7% over the past month. SYNT hit a new 52-week-high of $34.19 in the previous session. Syntel has gained 48.2% since the start of the year compared to the 9.3% move for the Computer and Technology sector and the 12.8% 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 EPS estimate in each of the last four quarters. In its last earnings report on April 19, 2018, Syntel reported EPS of $0.55 vs. the Zacks Consensus of $0.44 while it beat the consensus revenue estimate by 7.6%.
For the current fiscal year, Syntel is expected to post earnings of $1.93 per share on $954.22 million in revenues. This represents a -4.46% change in EPS on a 3.29% change in revenues. For the next fiscal year, the company is expected to earn $1.97 per share on $975.16 million in revenues. This represents a year-over-year change of 2.07% and 2.19%, respectively.
Valuation Metrics
Syntel may be at a 52-week-high right now, but what might the future hold for SYNT? 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.
Syntel has a Value Score of B. The stock's Growth and Momentum Scores are C and C, respectively, giving the company a VGM score of B.
In terms of its value breakdown, the stock currently trades at 17.6X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 15.4X versus its peer group's average of 18.4X. Additionally, the stock has a PEG ratio of 2.35. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
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, Syntel 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 (Buy) and Style Scores of A or B, it looks as if Syntel passes the test. Thus, it seems as though SYNT shares could have potential in the weeks and months to come.
While the Zacks Computer-Services industry is in the bottom 23% of all the industries we have in our universe, its still looks like there are some nice tailwinds for SYNT, even beyond its own solid fundamental situation.
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Syntel (SYNT) Hit Fresh Highs: Is There Still Room to Run?
Have you been paying attention to shares of Syntel ? Shares have been on the move with the stock up 7.7% over the past month. SYNT hit a new 52-week-high of $34.19 in the previous session. Syntel has gained 48.2% since the start of the year compared to the 9.3% move for the Computer and Technology sector and the 12.8% 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 EPS estimate in each of the last four quarters. In its last earnings report on April 19, 2018, Syntel reported EPS of $0.55 vs. the Zacks Consensus of $0.44 while it beat the consensus revenue estimate by 7.6%.
For the current fiscal year, Syntel is expected to post earnings of $1.93 per share on $954.22 million in revenues. This represents a -4.46% change in EPS on a 3.29% change in revenues. For the next fiscal year, the company is expected to earn $1.97 per share on $975.16 million in revenues. This represents a year-over-year change of 2.07% and 2.19%, respectively.
Valuation Metrics
Syntel may be at a 52-week-high right now, but what might the future hold for SYNT? 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.
Syntel has a Value Score of B. The stock's Growth and Momentum Scores are C and C, respectively, giving the company a VGM score of B.
In terms of its value breakdown, the stock currently trades at 17.6X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 15.4X versus its peer group's average of 18.4X. Additionally, the stock has a PEG ratio of 2.35. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
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, Syntel 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 (Buy) and Style Scores of A or B, it looks as if Syntel passes the test. Thus, it seems as though SYNT shares could have potential in the weeks and months to come.
While the Zacks Computer-Services industry is in the bottom 23% of all the industries we have in our universe, its still looks like there are some nice tailwinds for SYNT, even beyond its own solid fundamental situation.