Enova International (ENVA) Hits Fresh Highs: Is There Still Room to Run?
Have you been paying attention to shares of Enova International ENVA? Shares have been on the move with the stock up 31% over the past month. ENVA hit a new 52-week high of $30.11 in the previous session. Enova International has gained 93.4% since the start of the year compared to the -2.9% move for the Finance sector and the -4.1% 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 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 $2.27 per share on $1.02 billion in revenues. This represents a 65.69% change in EPS on a 20.84% change in revenues. For the next fiscal year, the company is expected to earn $2.7 per share on $1.16 billion in revenues. This represents a year-over-year change of 18.65% 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 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.
Enova International has a Value Score of A. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 12.9X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 16.1X versus its peer group's average of 11X. 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 passes the test. Thus, it seems as though ENVA shares could have a bit more room to run in the near term.
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