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Chemed (CHE) Hits a 52-Week High, Can the Run Continue?
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Have you been paying attention to shares of Chemed (CHE - Free Report) ? Shares have been on the move with the stock up 12.1% over the past month. CHE hit a new 52-week high of $313.81 in the previous session. Chemed has gained 28.3% since the start of the year compared to the -3.4% move for the Medical sector and the 3.1% year-to-date return for its peer group.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on April 19, 2018, Chemed reported EPS of $2.72 vs.the Zacks Consensus Estimate of $2.37 while it beat the consensus revenue estimate by 4.57%.
For the current fiscal year, Chemed is expected to post earnings of $11.08 per share on $1.76 billion in revenues. This represents a 31.44% change in EPS on a 5.72% change in revenues. For the next fiscal year, the company is expected to earn $12.05 per share on $1.86 billion in revenues. This represents a year-over-year change of 8.75% and 5.41%, respectively.
Valuation Metrics
Chemed may be at a 52-week high right now, but what might the future hold for CHE? 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.
Chemed has a Value Score of C. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 28.1X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 39.1X versus its peer group's average of 12.6X. Additionally, the stock has a PEG ratio of 2.81. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Chemed 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 and Style Scores of A or B, it looks as if Chemed fits the bill. Thus, it seems as though CHE shares could have potential in the weeks and months to come.
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Chemed (CHE) Hits a 52-Week High, Can the Run Continue?
Have you been paying attention to shares of Chemed (CHE - Free Report) ? Shares have been on the move with the stock up 12.1% over the past month. CHE hit a new 52-week high of $313.81 in the previous session. Chemed has gained 28.3% since the start of the year compared to the -3.4% move for the Medical sector and the 3.1% year-to-date return for its peer group.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on April 19, 2018, Chemed reported EPS of $2.72 vs.the Zacks Consensus Estimate of $2.37 while it beat the consensus revenue estimate by 4.57%.
For the current fiscal year, Chemed is expected to post earnings of $11.08 per share on $1.76 billion in revenues. This represents a 31.44% change in EPS on a 5.72% change in revenues. For the next fiscal year, the company is expected to earn $12.05 per share on $1.86 billion in revenues. This represents a year-over-year change of 8.75% and 5.41%, respectively.
Valuation Metrics
Chemed may be at a 52-week high right now, but what might the future hold for CHE? 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.
Chemed has a Value Score of C. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 28.1X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 39.1X versus its peer group's average of 12.6X. Additionally, the stock has a PEG ratio of 2.81. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Chemed Corporation Price and Consensus
Chemed Corporation Price and Consensus | Chemed Corporation Quote
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, Chemed 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 and Style Scores of A or B, it looks as if Chemed fits the bill. Thus, it seems as though CHE shares could have potential in the weeks and months to come.