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Amkor Technology (AMKR) Hits Fresh High: Is There Still Room to Run?

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Shares of Amkor Technology (AMKR - Free Report) have been strong performers lately, with the stock up 14.4% over the past month. The stock hit a new 52-week high of $10.37 in the previous session. Amkor Technology has gained 57.9% since the start of the year compared to the 23.2% move for the Zacks Computer and Technology sector and the 25.4% return for the Zacks Electronics - Semiconductors 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 July 29, 2019, Amkor Technology reported EPS of $-0.04 versus consensus estimate of $-0.07 while it beat the consensus revenue estimate by 0.64%.

For the current fiscal year, Amkor Technology is expected to post earnings of $0.15 per share on $3.87 billion in revenues. This represents a -71.7% change in EPS on a -10.32% change in revenues. For the next fiscal year, the company is expected to earn $0.6 per share on $4.25 billion in revenues. This represents a year-over-year change of 300% and 9.78%, respectively.

Valuation Metrics

Amkor Technology 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 has run ahead of itself.

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. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.

Amkor Technology has a Value Score of A. The stock's Growth and Momentum Scores are C and F, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 69.1X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 3.5X versus its peer group's average of 10.5X. 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, Amkor Technology 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 Amkor Technology meets the list of requirements. Thus, it seems as though Amkor Technology shares could still be poised for more gains ahead.

How Does Amkor Technology Stack Up to the Competition?

Shares of Amkor Technology have been rising, 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 impressive, including Cirrus Logic (CRUS - Free Report) , MagnaChip Semiconductor (MX - Free Report) , and Tokyo Electron (TOELY - 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 30% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Amkor Technology, even beyond its own solid fundamental situation.

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