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Arcosa, Inc. (ACA) Hit a 52 Week High, Can the Run Continue?
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Shares of Arcosa (ACA - Free Report) have been strong performers lately, with the stock up 3.3% over the past month. The stock hit a new 52-week high of $78.96 in the previous session. Arcosa has gained 44.7% since the start of the year compared to the 32.4% move for the Zacks Construction sector and the 35.3% return for the Zacks Building Products - Miscellaneous 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 August 3, 2023, Arcosa reported EPS of $0.76 versus consensus estimate of $0.58 while it beat the consensus revenue estimate by 2.63%.
For the current fiscal year, Arcosa is expected to post earnings of $2.82 per share on $2.27 billion in revenues. This represents a 28.77% change in EPS on a 1.23% change in revenues. For the next fiscal year, the company is expected to earn $3.29 per share on $2.49 billion in revenues. This represents a year-over-year change of 16.84% and 9.56%, respectively.
Valuation Metrics
Arcosa 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.
Arcosa has a Value Score of A. The stock's Growth and Momentum Scores are C and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 27.9X current fiscal year EPS estimates, which is a premium to the peer industry average of 17.6X. On a trailing cash flow basis, the stock currently trades at 14.6X versus its peer group's average of 11.4X. 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, Arcosa 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 Arcosa meets the list of requirements. Thus, it seems as though Arcosa shares could have a bit more room to run in the near term.
How Does ACA Stack Up to the Competition?
Shares of ACA 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 Janus International Group, Inc. (JBI - Free Report) . JBI has a Zacks Rank of # 1 (Strong Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of C.
Earnings were strong last quarter. Janus International Group, Inc. beat our consensus estimate by 25%, and for the current fiscal year, JBI is expected to post earnings of $0.92 per share on revenue of $1.08 billion.
Shares of Janus International Group, Inc. have gained 2.5% over the past month, and currently trade at a forward P/E of 12.47X and a P/CF of 11.22X.
The Building Products - Miscellaneous industry is in the top 12% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ACA and JBI, even beyond their own solid fundamental situation.
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Arcosa, Inc. (ACA) Hit a 52 Week High, Can the Run Continue?
Shares of Arcosa (ACA - Free Report) have been strong performers lately, with the stock up 3.3% over the past month. The stock hit a new 52-week high of $78.96 in the previous session. Arcosa has gained 44.7% since the start of the year compared to the 32.4% move for the Zacks Construction sector and the 35.3% return for the Zacks Building Products - Miscellaneous 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 August 3, 2023, Arcosa reported EPS of $0.76 versus consensus estimate of $0.58 while it beat the consensus revenue estimate by 2.63%.
For the current fiscal year, Arcosa is expected to post earnings of $2.82 per share on $2.27 billion in revenues. This represents a 28.77% change in EPS on a 1.23% change in revenues. For the next fiscal year, the company is expected to earn $3.29 per share on $2.49 billion in revenues. This represents a year-over-year change of 16.84% and 9.56%, respectively.
Valuation Metrics
Arcosa 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.
Arcosa has a Value Score of A. The stock's Growth and Momentum Scores are C and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 27.9X current fiscal year EPS estimates, which is a premium to the peer industry average of 17.6X. On a trailing cash flow basis, the stock currently trades at 14.6X versus its peer group's average of 11.4X. 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, Arcosa 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 Arcosa meets the list of requirements. Thus, it seems as though Arcosa shares could have a bit more room to run in the near term.
How Does ACA Stack Up to the Competition?
Shares of ACA 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 Janus International Group, Inc. (JBI - Free Report) . JBI has a Zacks Rank of # 1 (Strong Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of C.
Earnings were strong last quarter. Janus International Group, Inc. beat our consensus estimate by 25%, and for the current fiscal year, JBI is expected to post earnings of $0.92 per share on revenue of $1.08 billion.
Shares of Janus International Group, Inc. have gained 2.5% over the past month, and currently trade at a forward P/E of 12.47X and a P/CF of 11.22X.
The Building Products - Miscellaneous industry is in the top 12% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ACA and JBI, even beyond their own solid fundamental situation.