Underlying strength and healthy growth prospects make Piper Jaffray Companies (PJC - Free Report) a solid bet now. Further, the company is well poised for revenue growth, driven by decent capital markets performance. Moreover, it has a solid balance sheet position.
The company’s Zacks Consensus Estimate for earnings has moved 1.6% upward for 2019 and has remained unchanged for 2020, over the past 60 days. This indicates sound earnings growth potential. Currently, the stock carries a Zacks Rank #2 (Buy).
Also, shares of Piper Jaffray have rallied 8.5% so far this year, outperforming the industry’s growth of 6.6%.
Factors That Make Piper Jaffray a Viable Investment Option
Earnings strength: Over the past three to five years, Piper Jaffray witnessed earnings growth of 11%. Continuing the momentum, the earnings growth rate is expected to be 6% and 9.2% for 2019 and 2020, respectively.
Revenue growth: Piper Jaffray’s revenues have seen a compounded annual growth rate of 4.9%, over the last five years (2014-2018). The company’s business streamlining efforts and decent performance of capital markets will support revenues in the quarters ahead. Its projected consensus sales growth rate of 3.2% for 2019 and 6.6% for 2020 indicates continued upward momentum in top line.
Steady capital deployment: Piper Jaffray’s ability to generate positive cash flows and enhance shareholder value through regular dividend payments and share repurchases is commendable. Notably, as of Mar 31, 2019, the company had $102.8 million remaining under its buyback authorization. Driven by solid balance sheet position and earnings strength, the company’s capital deployment actions look sustainable.
Strong leverage: Piper Jaffray’s debt/equity ratio is nil compared to the industry’s average of 0.36. The relatively strong financial health of the company will help it perform better in an unstable economic environment compared with its peers.
Stock looks undervalued: Piper Jaffray looks undervalued when compared with the broader industry. Its current price/earnings (F1) and price/book ratios are below the respective industry averages.
Also, the stock has a Value Score of A. The Value Score condenses all valuation metrics into one actionable score that helps investors steer clear of “value traps” and identify stocks that are truly trading at a discount. Our research shows that stocks with a Style Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.
Other Stocks to Consider
Earnings estimates for JMP Group LLC (JMP - Free Report) has been moving 3% upward over the past 60 days for 2019. The company’s shares have rallied 1.7% so far this year. It sports a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
LPL Financial Holdings Inc.’s (LPLA - Free Report) earnings estimates for 2019 have moved 9.3% upward over the past 60 days. So far this year, this Zacks #1 Ranked company’s shares have jumped 28.2%.
Raymond James Financial, Inc.’s (RJF - Free Report) fiscal 2019 earnings estimates has been revised 1.1% upward over the past 60 days. This Zacks Rank #2 company’s shares have risen 7.9% so far this year.
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