Is there still room to run?
Are you paying attention to the shares of CECO Environmental (CECO)? The stock has been moving with a 13% increase in shares over the last month. In the previous session, CECO Environmental hit a new 52 week high of $14.38. CECO Environmental has seen a 21% increase since the beginning of the year, compared to the -7.4% gain for Zacks Industrial Products and the -9.6% return on the Zacks Pollution Control industries.
What is driving the outperformance?
This stock has a remarkable track record of positive earnings surprises. It has not missed our consensus earnings estimate in any quarter. CECO’s last earnings report was on November 7, 2022. It reported $0.2 per share versus $0.14 consensus estimate. However, it beat consensus revenue estimates by 11.69%.
CECO expects to earn $0.94 per share on revenues of $410.15 millions for the current fiscal year.
Metrics of Valuation
CECO may be trading at a 52-week peak right now. But what is the future for the stock? This question requires that we look at valuation metrics to see if there is a need for the stock to pull back from its current level.
We can also look at Zacks Style scores, which provide investors with additional ways to sort through stocks, beyond just looking at the Zacks Rank. These styles are represented as grades that range from A through F in the Value, Growth, or Momentum categories, with a combined VGM Score. The style scores were created to assist investors in selecting the right Zacks Rank stocks based their investment style.
CECO has a Value Score (B) The stock’s Growth & Momentum Scores for CECO are A and B, respectively. This gives it a VGM Score Score of A.
According to its value breakdown, the stock trades at 15X the current fiscal year estimates for EPS. This is significantly lower than the peer industry average 24.9X. The stock trades at 25.2X on a trailing cashflow basis, compared to its peer group average of 16.4X. Furthermore, the stock boasts a PEG of 1. The PEG ratio of 1. isn’t sufficient to rank the stock among the best-valued stocks.
Zacks Rank
The stock’s Zacks Rank is also important as it supersedes any style trends. CECO currently holds a Zacks Rank #2 (Buy), thanks to its rising earnings estimates.
CECO seems to have passed our Zacks Rank 1 (Strong Buy), 2 (Buy), and 3 (Strong Sell) Style Scores. CECO shares may have more potential for growth in the short term.
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CECO Environmental Corp. (CECO) : Free Stock Analysis Report