Have you been paying attention to shares of Cooper Tire Rubber ? Shares have been on the move with the stock up 4.6% over the past month. The stock hit a new 52-week high of $39.44 in the previous session. Cooper Tire Rubber has gained 31.7% since the start of the year compared to the 48.3% move for the Zacks Auto-Tires-Trucks sector and the -17.2% return for the Zacks Rubber - Tires 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 October 29, 2020, Cooper Tire reported EPS of $2.42 versus consensus estimate of $0.67 while it beat the consensus revenue estimate by 13.68%.
For the current fiscal year, Cooper Tire is expected to post earnings of $2.97 per share on $2.54 billion in revenues. This represents a 55.5% change in EPS on a -7.7% change in revenues. For the next fiscal year, the company is expected to earn $3.64 per share on $2.8 billion in revenues. This represents a year-over-year change of 22.56% and 10.32%, respectively.
Valuation Metrics
Cooper Tire 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 these give investors a variety of ways to comb 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.
Cooper Tire has a Value Score of B. The stock's Growth and Momentum Scores are A and F, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 12.8X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 6.8X versus its peer group's average of 6.7X. 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, Cooper Tire currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
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 Cooper Tire passes the test. Thus, it seems as though Cooper Tire shares could have potential in the weeks and months to come.
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Cooper Tire (CTB) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Cooper Tire Rubber ? Shares have been on the move with the stock up 4.6% over the past month. The stock hit a new 52-week high of $39.44 in the previous session. Cooper Tire Rubber has gained 31.7% since the start of the year compared to the 48.3% move for the Zacks Auto-Tires-Trucks sector and the -17.2% return for the Zacks Rubber - Tires 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 October 29, 2020, Cooper Tire reported EPS of $2.42 versus consensus estimate of $0.67 while it beat the consensus revenue estimate by 13.68%.
For the current fiscal year, Cooper Tire is expected to post earnings of $2.97 per share on $2.54 billion in revenues. This represents a 55.5% change in EPS on a -7.7% change in revenues. For the next fiscal year, the company is expected to earn $3.64 per share on $2.8 billion in revenues. This represents a year-over-year change of 22.56% and 10.32%, respectively.
Valuation Metrics
Cooper Tire 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 these give investors a variety of ways to comb 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.
Cooper Tire has a Value Score of B. The stock's Growth and Momentum Scores are A and F, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 12.8X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 6.8X versus its peer group's average of 6.7X. 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, Cooper Tire currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
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 Cooper Tire passes the test. Thus, it seems as though Cooper Tire shares could have potential in the weeks and months to come.