Shares of Insight Enterprises (NSIT - Free Report) have been strong performers lately, with the stock up 11.7% over the past month. The stock hit a new 52-week high of $66.47 in the previous session. Insight Enterprises has gained 52.4% since the start of the year compared to the 23.6% move for the Zacks Retail-Wholesale sector and the 21.1% return for the Zacks Retail - Mail Order 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 November 6, 2019, Insight Enterprises reported EPS of $1.1 versus consensus estimate of $1.07 while it missed the consensus revenue estimate by 3.85%.
For the current fiscal year, Insight Enterprises is expected to post earnings of $4.98 per share on $7.75 billion in revenues. This represents a 7.56% change in EPS on a 9.28% change in revenues. For the next fiscal year, the company is expected to earn $5.81 per share on $9.39 billion in revenues. This represents a year-over-year change of 16.73% and 21.14%, respectively.
Insight Enterprises 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Insight Enterprises has a Value Score of A. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 12.5X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 10.8X versus its peer group's average of 10.8X. 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 consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Insight Enterprises currently has a Zacks Rank of #1 (Strong 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 Insight Enterprises fits the bill. Thus, it seems as though Insight Enterprises shares could have potential in the weeks and months to come.
How Does Insight Enterprises Stack Up to the Competition?
Shares of Insight Enterprises 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 The Home Depot (HD - Free Report) , Costco Wholesale (COST - Free Report) , and O'Reilly Automotive (ORLY - 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 5% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Insight Enterprises, even beyond its own solid fundamental situation.