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Absolute Software Corporation (ALSWF) Soars to 52-Week High, Time to Cash Out?

Tablet displaying intraday stock performance

Have you been paying attention to shares of Absolute Software (ALSWF)? Shares have been on the move with the stock up 7.8% over the past month. The stock hit a new 52-week high of $6.6 in the previous session. Absolute Software has gained 14.1% since the start of the year compared to the 11.3% move for the Zacks Computer and Technology sector and the 17.4% return for the Zacks Security 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 las t earnings report on February 4, 2019, Absolute Software Corporation reported EPS of $0.04 versus consensus estimate of $0.02.

Valuation Metrics

Absolute Software Corporation 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

Absolute Software Corporation has a Value Score of D. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 81X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 16.8X versus its peer group's average of 90.8X. 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, Absolute Software Corporation 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 Absolute Software Corporation passes the test. Thus, it seems as though Absolute Software Corporation shares could have a bit more room to run in the near term.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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