Shares of Insight Enterprises (NSIT) have been strong performers lately, with the stock up 6% over the past month. The stock hit a new 52-week high of $67.43 in the previous session. Insight Enterprises has gained 65% since the start of the year compared to the 23.8% move for the Zacks Retail-Wholesale sector and the 29% return for the Zacks Retail - Mail Order 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 6, 2019, Insight Enterprises reported EPS of $1.1 versus consensus estimate of $1.07 while it missed the consensus revenue estimate by 3.85%.
For the current fiscal year, Insight Enterprises is expected to post earnings of $5.45 per share on $7.8 billion in revenues. This represents a 17.93% change in EPS on a 9.92% change in revenues. For the next fiscal year, the company is expected to earn $6.29 per share on $9.36 billion in revenues. This represents a year-over-year change of 15.29% and 20%, respectively.
Insight Enterprises 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. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Insight Enterprises has a Value Score of A. The stock's Growth and Momentum Scores are B and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 12.3X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 11.7X versus its peer group's average of 11.7X. 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, Insight Enterprises 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 Insight Enterprises passes the test. Thus, it seems as though Insight Enterprises shares could still be poised for more gains ahead.
How Does Insight Enterprises Stack Up to the Competition?
Shares of Insight Enterprises have been moving higher, 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 looking good, including Casey's General Stores (CASY), RH (RH), and O'Reilly Automotive (ORLY), 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 13% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Insight Enterprises, even beyond its own solid fundamental situation.
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Insight Enterprises, Inc. (NSIT) : Free Stock Analysis Report
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