Have you been paying attention to shares of Everi Holdings (EVRI - Free Report) ? Shares have been on the move with the stock up 28.7% over the past month. The stock hit a new 52-week high of $9.92 in the previous session. Everi Holdings has gained 92.6% since the start of the year compared to the 20.4% move for the Zacks Business Services sector and the 37.2% return for the Zacks Business - Services industry.
What's Driving the Outperformance?
The stock has a great 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 March 12, 2019, Everi Holdings reported EPS of $-0.04 versus consensus estimate of $-0.05 while it beat the consensus revenue estimate by 5.41%.
For the current fiscal year, Everi Holdings is expected to post earnings of $0.17 per share on $507.94 million in revenues. This represents an 80% change in EPS on an 8.18% change in revenues. For the next fiscal year, the company is expected to earn $0.37 per share on $544.55 million in revenues. This represents a year-over-year change of 108.33% and 7.21%, respectively.
Everi Holdings may be at a 52-week high right now, but what might the future hold for the stock? 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.
Everi Holdings has a Value Score of A. The stock's Growth and Momentum Scores are A and F, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 56.7X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 4.7X versus its peer group's average of 9.7X. Additionally, the stock has a PEG ratio of 2.83. 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, Everi Holdings 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 Everi Holdings fits the bill. Thus, it seems as though Everi Holdings shares could have a bit more room to run in the near term.