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Titan Machinery (TITN) Hits 52-Week High, Can the Run Continue?
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Shares of Titan Machinery (TITN - Free Report) have been strong performers lately, with the stock up 21.7% over the past month. The stock hit a new 52-week high of $37.1 in the previous session. Titan Machinery has gained 80.4% since the start of the year compared to the -3.8% move for the Zacks Retail-Wholesale sector and the 40.3% return for the Zacks Automotive - Retail and Whole Sales 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 23, 2021, Titan Machinery reported EPS of $0.96 versus consensus estimate of $0.61.
For the current fiscal year, Titan Machinery is expected to post earnings of $2.13 per share on $1.68 billion in revenues. This represents a 69.05% change in EPS on a 19.2% change in revenues. For the next fiscal year, the company is expected to earn $2.48 per share on $1.86 billion in revenues. This represents a year-over-year change of 16.67% and 10.77%, respectively.
Valuation Metrics
Titan Machinery 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 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Titan Machinery has a Value Score of A. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 16.6X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 15.3X versus its peer group's average of 10.5X. 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 consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Titan Machinery currently has a Zacks Rank of #2 (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 Titan Machinery passes the test. Thus, it seems as though Titan Machinery shares could still be poised for more gains ahead.
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Titan Machinery (TITN) Hits 52-Week High, Can the Run Continue?
Shares of Titan Machinery (TITN - Free Report) have been strong performers lately, with the stock up 21.7% over the past month. The stock hit a new 52-week high of $37.1 in the previous session. Titan Machinery has gained 80.4% since the start of the year compared to the -3.8% move for the Zacks Retail-Wholesale sector and the 40.3% return for the Zacks Automotive - Retail and Whole Sales 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 23, 2021, Titan Machinery reported EPS of $0.96 versus consensus estimate of $0.61.
For the current fiscal year, Titan Machinery is expected to post earnings of $2.13 per share on $1.68 billion in revenues. This represents a 69.05% change in EPS on a 19.2% change in revenues. For the next fiscal year, the company is expected to earn $2.48 per share on $1.86 billion in revenues. This represents a year-over-year change of 16.67% and 10.77%, respectively.
Valuation Metrics
Titan Machinery 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 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Titan Machinery has a Value Score of A. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 16.6X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 15.3X versus its peer group's average of 10.5X. 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 consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Titan Machinery currently has a Zacks Rank of #2 (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 Titan Machinery passes the test. Thus, it seems as though Titan Machinery shares could still be poised for more gains ahead.