Griffon Corporation (GFF) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Griffon (GFF)? Shares have been on the move with the stock up 15.1% over the past month. The stock hit a new 52-week high of $70.65 in the previous session. Griffon has gained 13.5% since the start of the year compared to the 5.7% move for the Zacks Conglomerates sector and the 5.7% return for the Zacks Diversified Operations 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 February 7, 2024, Griffon reported EPS of $1.07 versus consensus estimate of $0.78 while it beat the consensus revenue estimate by 7.68%.
For the current fiscal year, Griffon is expected to post earnings of $4.80 per share on $2.65 billion in revenues. This represents a 5.73% change in EPS on a -1.39% change in revenues. For the next fiscal year, the company is expected to earn $5.97 per share on $2.73 billion in revenues. This represents a year-over-year change of 24.25% and 3.12%, respectively.
Valuation Metrics
Griffon 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.
Griffon has a Value Score of B. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 14.4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 17.4X. On a trailing cash flow basis, the stock currently trades at 8.9X versus its peer group's average of 7.7X. Additionally, the stock has a PEG ratio of 0.72. 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 consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Griffon 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 Griffon fits the bill. Thus, it seems as though Griffon shares could still be poised for more gains ahead.
How Does GFF Stack Up to the Competition?
Shares of GFF have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Carlisle Companies Incorporated (CSL). CSL has a Zacks Rank of # 1 (Strong Buy) and a Value Score of D, a Growth Score of B, and a Momentum Score of B.
Earnings were strong last quarter. Carlisle Companies Incorporated beat our consensus estimate by 20.17%, and for the current fiscal year, CSL is expected to post earnings of $18.03 per share on revenue of $4.85 billion.
Shares of Carlisle Companies Incorporated have gained 11.6% over the past month, and currently trade at a forward P/E of 19.43X and a P/CF of 17.24X.
The Diversified Operations industry is in the top 12% of all the industries we have in our universe, so it looks like there are some nice tailwinds for GFF and CSL, even beyond their own solid fundamental situation.
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Griffon Corporation (GFF) : Free Stock Analysis Report
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