Hain Celestial (HAIN) Soars to 52-Week High, Time to Cash Out?

Shares of The Hain Celestial Group (HAIN) have been strong performers lately, with the stock up 1% over the past month. The stock hit a new 52-week high of $35.4 in the previous session. The Hain Celestial Group has gained 32.5% since the start of the year compared to the -4.1% move for the Zacks Consumer Staples sector and the -1.8% return for the Zacks Food - Miscellaneous 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 August 25, 2020, Hain Celestial reported EPS of $0.32 versus consensus estimate of $0.27 while it missed the consensus revenue estimate by 0.22%.

For the current fiscal year, Hain Celestial is expected to post earnings of $1.14 per share on $2.06 billion in revenues. This represents a 35.71% change in EPS on a 0.16% change in revenues. For the next fiscal year, the company is expected to earn $1.32 per share on $2.09 billion in revenues. This represents a year-over-year change of 15.79% and 1.53%, respectively.

Valuation Metrics

Hain Celestial 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 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.

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

In terms of its value breakdown, the stock currently trades at 30.3X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 25.1X versus its peer group's average of 11.6X. 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, Hain Celestial 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 (Buy) and Style Scores of A or B, it looks as if Hain Celestial passes the test. Thus, it seems as though Hain Celestial 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.

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