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The Ensign Group, Inc. (ENSG) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of Ensign Group (ENSG - Free Report) ? Shares have been on the move with the stock up 7.6% over the past month. The stock hit a new 52-week high of $150.81 in the previous session. Ensign Group has gained 33.8% since the start of the year compared to the 11.9% move for the Zacks Medical sector and the 30.2% return for the Zacks Medical - Nursing Homes 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 July 25, 2024, Ensign Group reported EPS of $1.32 versus consensus estimate of $1.29.
For the current fiscal year, Ensign Group is expected to post earnings of $5.44 per share on $4.22 billion in revenues. This represents a 14.05% change in EPS on a 13.06% change in revenues. For the next fiscal year, the company is expected to earn $5.99 per share on $4.62 billion in revenues. This represents a year-over-year change of 10.11% and 9.51%, respectively.
Valuation Metrics
Ensign Group 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Ensign Group has a Value Score of B. The stock's Growth and Momentum Scores are C and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 27.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 27.6X. On a trailing cash flow basis, the stock currently trades at 26.1X versus its peer group's average of 22.1X. Additionally, the stock has a PEG ratio of 1.84. 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, Ensign Group currently has a Zacks Rank of #2 (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 Ensign Group fits the bill. Thus, it seems as though Ensign Group shares could still be poised for more gains ahead.
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The Ensign Group, Inc. (ENSG) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Ensign Group (ENSG - Free Report) ? Shares have been on the move with the stock up 7.6% over the past month. The stock hit a new 52-week high of $150.81 in the previous session. Ensign Group has gained 33.8% since the start of the year compared to the 11.9% move for the Zacks Medical sector and the 30.2% return for the Zacks Medical - Nursing Homes 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 July 25, 2024, Ensign Group reported EPS of $1.32 versus consensus estimate of $1.29.
For the current fiscal year, Ensign Group is expected to post earnings of $5.44 per share on $4.22 billion in revenues. This represents a 14.05% change in EPS on a 13.06% change in revenues. For the next fiscal year, the company is expected to earn $5.99 per share on $4.62 billion in revenues. This represents a year-over-year change of 10.11% and 9.51%, respectively.
Valuation Metrics
Ensign Group 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Ensign Group has a Value Score of B. The stock's Growth and Momentum Scores are C and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 27.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 27.6X. On a trailing cash flow basis, the stock currently trades at 26.1X versus its peer group's average of 22.1X. Additionally, the stock has a PEG ratio of 1.84. 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, Ensign Group currently has a Zacks Rank of #2 (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 Ensign Group fits the bill. Thus, it seems as though Ensign Group shares could still be poised for more gains ahead.