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Harmonic (HLIT) Hits 52-Week High, Can the Run Continue?
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Shares of Harmonic (HLIT - Free Report) have been strong performers lately, with the stock up 20.6% over the past month. The stock hit a new 52-week high of $11.1 in the previous session. Harmonic has gained 42.1% since the start of the year compared to the 26.1% move for the Zacks Computer and Technology sector and the 10% return for the Zacks Communication - Components 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 1, 2021, Harmonic reported EPS of $0.09 versus consensus estimate of $0.04.
Valuation Metrics
Harmonic 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 is due for a pullback from this level.
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.
Harmonic has a Value Score of D. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 38.5X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 77X versus its peer group's average of 16.1X. Additionally, the stock has a PEG ratio of 2.57. 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, Harmonic 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 Harmonic fits the bill. Thus, it seems as though Harmonic shares could have a bit more room to run in the near term.
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Harmonic (HLIT) Hits 52-Week High, Can the Run Continue?
Shares of Harmonic (HLIT - Free Report) have been strong performers lately, with the stock up 20.6% over the past month. The stock hit a new 52-week high of $11.1 in the previous session. Harmonic has gained 42.1% since the start of the year compared to the 26.1% move for the Zacks Computer and Technology sector and the 10% return for the Zacks Communication - Components 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 1, 2021, Harmonic reported EPS of $0.09 versus consensus estimate of $0.04.
Valuation Metrics
Harmonic 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 is due for a pullback from this level.
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.
Harmonic has a Value Score of D. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 38.5X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 77X versus its peer group's average of 16.1X. Additionally, the stock has a PEG ratio of 2.57. 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, Harmonic 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 Harmonic fits the bill. Thus, it seems as though Harmonic shares could have a bit more room to run in the near term.