Have you been paying attention to shares of ChannelAdvisorECOM ? Shares have been on the move with the stock up 8% over the past month. ECOM hit a new 52-week high of $15.10 in the previous session. ChannelAdvisor has gained 65% since the start of the year compared to the 7.7% move for the Computer and Technology sector and the -0.5% 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 May 10, 2018, ChannelAdvisor reported EPS of $-0.02 versus the Zacks Consensus Estimate of $-0.07 while it beat the consensus revenue estimate by 4.29%.
For the current fiscal year, ChannelAdvisor is expected to post earnings of $-0.4 per share on $130.94 million in revenues. This represents a 150% change in EPS on a 6.86% change in revenues. For the next fiscal year, the company is expected to earn $-0.4 per share on $139.68 million in revenues. This represents a year-over-year change of 246.88% and 6.67%, respectively.
ChannelAdvisor may be at a 52-week high right now, but what might the future hold for ECOM? 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 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.
ChannelAdvisor has a Value Score of F. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
ChannelAdvisor Corporation Price and Consensus
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, ChannelAdvisor 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 and Style Scores of A or B, it looks as if ChannelAdvisor passes the test. Thus, it seems as though ECOM shares could have potential in the weeks and months to come.
How Does ChannelAdvisor Stack Up to the Competition?
Shares of ChannelAdvisor have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also looking good, including Vonage Holdings VG , Sabre SABR , and Momo MOMO , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 32% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ECOM, even beyond its own solid fundamental situation.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.