Shares of FORTERRA INC (FRTA) have been strong performers lately, with the stock up 7.8% over the past month. The stock hit a new 52-week high of $11.94 in the previous session. FORTERRA INC has gained 213.8% since the start of the year compared to the 40.1% move for the Zacks Construction sector and the 36% return for the Zacks Building Products - Concrete and Aggregates 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 November 4, 2019, FORTERRA INC reported EPS of $0.34 versus consensus estimate of $0.11 while it beat the consensus revenue estimate by 4.62%.
For the current fiscal year, FORTERRA INC is expected to post earnings of $-0.1 per share on $1.51 billion in revenues. This represents a 77.27% change in EPS on a 1.91% change in revenues. For the next fiscal year, the company is expected to earn $0.24 per share on $1.56 billion in revenues. This represents a year-over-year change of 340% and 3.18%, respectively.
FORTERRA INC 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.
FORTERRA INC has a Value Score of B. The stock's Growth and Momentum Scores are A and F, respectively, giving the company a VGM Score of B.
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, FORTERRA INC 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 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if FORTERRA INC passes the test. Thus, it seems as though FORTERRA INC shares could have potential in the weeks and months to come.
How Does FORTERRA INC Stack Up to the Competition?
Shares of FORTERRA INC have been soaring, 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 impressive, including Comfort Systems USA (FIX), Installed Building Products (IBP), and TopBuild (BLD), 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 35% of all the industries we have in our universe, so it looks like there are some nice tailwinds for FORTERRA INC, even beyond its own solid fundamental situation.
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FORTERRA INC (FRTA) : Free Stock Analysis Report
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