Hibbett Sports (HIBB - Free Report) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.
The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this sporting goods retailer, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
For Hibbett, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.
The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:
12 Month EPS
Current-Quarter Estimate Revisions
The earnings estimate of $0.62 per share for the current quarter represents a change of +8.77% from the number reported a year ago.
Over the last 30 days, one estimate has moved higher for Hibbett compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 9.82%.
Current-Year Estimate Revisions
For the full year, the earnings estimate of $2.45 per share represents a change of +38.42% from the year-ago number.
There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, two estimates have moved up for Hibbett versus no negative revisions. This has pushed the consensus estimate 11.87% higher.
Favorable Zacks Rank
Thanks to promising estimate revisions, Hibbett currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
Hibbett shares have added 23.4% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.