We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
LPL Financial Holdings Inc. (LPLA) Soars to 52-Week High, Time to Cash Out?
Read MoreHide Full Article
Have you been paying attention to shares of LPL Financial Holdings Inc. (LPLA - Free Report) ? Shares have been on the move with the stock up 17.2% over the past month. The stock hit a new 52-week high of $219.1 in the previous session. LPL Financial Holdings Inc. has gained 36.5% since the start of the year compared to the -3.5% move for the Zacks Finance sector and the -9.3% return for the Zacks Financial - Investment Bank 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 February 3, 2022, LPL Financial Holdings Inc. reported EPS of $1.63 versus consensus estimate of $1.54.
For the current fiscal year, LPL Financial Holdings Inc. is expected to post earnings of $9.85 per share on $9.16 billion in revenues. This represents a 40.31% change in EPS on a 18.59% change in revenues. For the next fiscal year, the company is expected to earn $14.58 per share on $10.84 billion in revenues. This represents a year-over-year change of 48.08% and 18.4%, respectively.
Valuation Metrics
LPL Financial Holdings Inc. 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. 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.
LPL Financial Holdings Inc. has a Value Score of C. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 22.2X current fiscal year EPS estimates, which is a premium to the peer industry average of 12.1X. On a trailing cash flow basis, the stock currently trades at 21.6X versus its peer group's average of 8.1X. Additionally, the stock has a PEG ratio of 0.69. 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, LPL Financial Holdings Inc. 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 LPL Financial Holdings Inc. meets the list of requirements. Thus, it seems as though LPL Financial Holdings Inc. shares could have a bit more room to run in the near term.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
LPL Financial Holdings Inc. (LPLA) Soars to 52-Week High, Time to Cash Out?
Have you been paying attention to shares of LPL Financial Holdings Inc. (LPLA - Free Report) ? Shares have been on the move with the stock up 17.2% over the past month. The stock hit a new 52-week high of $219.1 in the previous session. LPL Financial Holdings Inc. has gained 36.5% since the start of the year compared to the -3.5% move for the Zacks Finance sector and the -9.3% return for the Zacks Financial - Investment Bank 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 February 3, 2022, LPL Financial Holdings Inc. reported EPS of $1.63 versus consensus estimate of $1.54.
For the current fiscal year, LPL Financial Holdings Inc. is expected to post earnings of $9.85 per share on $9.16 billion in revenues. This represents a 40.31% change in EPS on a 18.59% change in revenues. For the next fiscal year, the company is expected to earn $14.58 per share on $10.84 billion in revenues. This represents a year-over-year change of 48.08% and 18.4%, respectively.
Valuation Metrics
LPL Financial Holdings Inc. 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. 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.
LPL Financial Holdings Inc. has a Value Score of C. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 22.2X current fiscal year EPS estimates, which is a premium to the peer industry average of 12.1X. On a trailing cash flow basis, the stock currently trades at 21.6X versus its peer group's average of 8.1X. Additionally, the stock has a PEG ratio of 0.69. 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, LPL Financial Holdings Inc. 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 LPL Financial Holdings Inc. meets the list of requirements. Thus, it seems as though LPL Financial Holdings Inc. shares could have a bit more room to run in the near term.