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Have you been paying attention to shares of Apollo Medical Holdings (AMEH)? Shares have been on the move with the stock up 10.6% over the past month. The stock hit a new 52-week high of $27.35 in the previous session. Apollo Medical Holdings has gained 48.3% since the start of the year compared to the 1.1% move for the Zacks Medical sector and the -3.1% return for the Zacks Medical Services 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 March 10, 2021, Apollo Medical Holdings, Inc. reported EPS of $0.27 versus consensus estimate of $0.18.
While Apollo Medical Holdings, Inc. has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? 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.
Apollo Medical Holdings, Inc. 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 25.6X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 26X versus its peer group's average of 21.9X. Additionally, the stock has a PEG ratio of 5.11. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Apollo Medical Holdings, Inc. 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 Apollo Medical Holdings, Inc. passes the test. Thus, it seems as though Apollo Medical Holdings, Inc. shares could have a bit more room to run in the near term.
How Does Apollo Medical Holdings, Inc. Stack Up to the Competition?
Shares of Apollo Medical Holdings, Inc. 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 Healthways (TVTY), Tenet Healthcare (THC), and HCA Healthcare (HCA), 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.
However, it is worth noting that the Zacks Industry Rank for this group is in the bottom half of the ranking, so it isn't all good news for Apollo Medical Holdings, Inc. Still, the fundamentals for Apollo Medical Holdings, Inc. are promising, and it still has potential despite being at a 52-week high.
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Apollo Medical Holdings, Inc. (AMEH) : Free Stock Analysis Report
Tenet Healthcare Corporation (THC) : Free Stock Analysis Report
HCA Healthcare, Inc. (HCA) : Free Stock Analysis Report
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