Shares of Personalis (PSNL) have been strong performers lately, with the stock up 167.7% over the past month. The stock hit a new 52-week high of $4.58 in the previous session. Personalis has gained 105.2% since the start of the year compared to the 6.7% move for the Zacks Medical sector and the 13.4% return for the Zacks Medical - Generic Drugs industry.
What's Driving the Outperformance?
The stock has a great 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 7, 2024, Personalis reported EPS of $-0.24 versus consensus estimate of $-0.34 while it beat the consensus revenue estimate by 14.01%.
For the current fiscal year, Personalis is expected to post earnings of -$1.18 per share on $79.1 million in revenues. This represents a 45.62% change in EPS on a 7.64% change in revenues. For the next fiscal year, the company is expected to earn -$1.02 per share on $89.97 million in revenues. This represents a year-over-year change of 13.14% and 13.75%, respectively.
Valuation Metrics
Personalis 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 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.
Personalis has a Value Score of F. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Personalis 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 Personalis fits the bill. Thus, it seems as though Personalis 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.
