Have you been paying attention to shares of Good Times Restaurants (GTIM - Free Report) ? Shares have been on the move with the stock up 1.2% over the past month. GTIM hit a new 52-week high of $4.3 in the previous session. Good Times Restaurants has gained 62.3% since the start of the year compared to the 14.3% move for the Zacks Retail-Wholesale sector and the 0.5% return for the Zacks Retail - Restaurants industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 9, 2018, Good Times Restaurants reported EPS of $0.02 versus consensus estimate of $-0.01.
While GTIM 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.
Good Times Restaurants 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 A.
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Good Times Restaurants currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
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 Good Times Restaurants fits the bill. Thus, it seems as though GTIM shares could still be poised for more gains ahead.