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Enterprise Financial Services Corporation (EFSC) Soars to 52-Week High, Time to Cash Out?
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Have you been paying attention to shares of Enterprise Financial Services (EFSC - Free Report) ? Shares have been on the move with the stock up 16.3% over the past month. The stock hit a new 52-week high of $54.27 in the previous session. Enterprise Financial Services has gained 13.8% since the start of the year compared to the -14.8% move for the Zacks Finance sector and the 3.1% return for the Zacks Banks - Midwest 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 24, 2022, Enterprise Financial Services reported EPS of $1.31 versus consensus estimate of $1.23 while it beat the consensus revenue estimate by 1.72%.
For the current fiscal year, Enterprise Financial Services is expected to post earnings of $5.08 per share on $521.64 million in revenues. This represents a 2.21% change in EPS on a 21.9% change in revenues. For the next fiscal year, the company is expected to earn $5.55 per share on $591.84 million in revenues. This represents a year-over-year change of 9.4% and 13.46%, respectively.
Valuation Metrics
Enterprise Financial Services 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 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. 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.
Enterprise Financial Services has a Value Score of C. The stock's Growth and Momentum Scores are C and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 10.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 10.6X. On a trailing cash flow basis, the stock currently trades at 10.7X versus its peer group's average of 8.7X. 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 consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Enterprise Financial Services 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 Enterprise Financial Services passes the test. Thus, it seems as though Enterprise Financial Services shares could have a bit more room to run in the near term.
How Does EFSC Stack Up to the Competition?
Shares of EFSC have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Associated BancCorp (ASB - Free Report) . ASB has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of D, and a Momentum Score of B.
Earnings were strong last quarter. Associated BancCorp beat our consensus estimate by 6.90%, and for the current fiscal year, ASB is expected to post earnings of $2.34 per share on revenue of $1.24 billion.
Shares of Associated BancCorp have gained 14.3% over the past month, and currently trade at a forward P/E of 10.96X and a P/CF of 7.79X.
The Banks - Midwest industry is in the top 5% of all the industries we have in our universe, so it looks like there are some nice tailwinds for EFSC and ASB, even beyond their own solid fundamental situation.
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Enterprise Financial Services Corporation (EFSC) Soars to 52-Week High, Time to Cash Out?
Have you been paying attention to shares of Enterprise Financial Services (EFSC - Free Report) ? Shares have been on the move with the stock up 16.3% over the past month. The stock hit a new 52-week high of $54.27 in the previous session. Enterprise Financial Services has gained 13.8% since the start of the year compared to the -14.8% move for the Zacks Finance sector and the 3.1% return for the Zacks Banks - Midwest 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 24, 2022, Enterprise Financial Services reported EPS of $1.31 versus consensus estimate of $1.23 while it beat the consensus revenue estimate by 1.72%.
For the current fiscal year, Enterprise Financial Services is expected to post earnings of $5.08 per share on $521.64 million in revenues. This represents a 2.21% change in EPS on a 21.9% change in revenues. For the next fiscal year, the company is expected to earn $5.55 per share on $591.84 million in revenues. This represents a year-over-year change of 9.4% and 13.46%, respectively.
Valuation Metrics
Enterprise Financial Services 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 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. 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.
Enterprise Financial Services has a Value Score of C. The stock's Growth and Momentum Scores are C and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 10.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 10.6X. On a trailing cash flow basis, the stock currently trades at 10.7X versus its peer group's average of 8.7X. 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 consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Enterprise Financial Services 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 Enterprise Financial Services passes the test. Thus, it seems as though Enterprise Financial Services shares could have a bit more room to run in the near term.
How Does EFSC Stack Up to the Competition?
Shares of EFSC have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Associated BancCorp (ASB - Free Report) . ASB has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of D, and a Momentum Score of B.
Earnings were strong last quarter. Associated BancCorp beat our consensus estimate by 6.90%, and for the current fiscal year, ASB is expected to post earnings of $2.34 per share on revenue of $1.24 billion.
Shares of Associated BancCorp have gained 14.3% over the past month, and currently trade at a forward P/E of 10.96X and a P/CF of 7.79X.
The Banks - Midwest industry is in the top 5% of all the industries we have in our universe, so it looks like there are some nice tailwinds for EFSC and ASB, even beyond their own solid fundamental situation.