Enova (ENVA) Hits a 52-Week High, Can the Run Continue?

Buy or sell dice

Have you been paying attention to shares of Enova InternationalENVA ? Shares have been on the move with the stock up 7.5% over the past month. ENVA hit a new 52-week high of $35.90 in the previous session. Enova International has gained 130.3% since the start of the year compared to the -0.7% move for the Finance sector and the 1.6% year-to-date return for its peer group.

What's Driving the Outperformance?

The stock has a great 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 26, 2018, Enova International reported EPS of $1.02 versus the Zacks Consensus Estimate of $0.7 while it beat the consensus revenue estimate by 9.46%.

For the current fiscal year, Enova International is expected to post earnings of $2.14 per share on $1.02 billion in revenues. This represents a 77.37% change in EPS on a 20.84% change in revenues. For the next fiscal year, the company is expected to earn $2.25 per share on $1.16 billion in revenues. This represents a year-over-year change of 17.42% and 13.54%, respectively.

Valuation Metrics

Enova International may be at a 52-week high right now, but what might the future hold for ENVA? 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.

Enova International has a Value Score of A. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of A.

In terms of its value breakdown, the stock currently trades at 16.3X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 19.2X 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.

Enova International, Inc. Price and Consensus

Enova International, Inc. Price and Consensus | Enova International, Inc. 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, Enova International currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 or 2 (Buy) and Style Scores of A or B, it looks as if Enova International fits the bill. Thus, it seems as though ENVA shares could have potential in the weeks and months to come.

How Does Enova International Stack Up to the Competition?

Shares of Enova International have been rising, 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 solid potential picks, including First Cash FCFS , Saratoga Investment SAR , and Aercap Holdings N.V. AER , 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 21% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ENVA, even beyond its own solid fundamental situation.

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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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