Shares of MettlerToledo International (MTD) have been strong performers lately, with the stock up 14.8% over the past month. The stock hit a new 52-week high of $953.7 in the previous session. MettlerToledo International has gained 17.9% since the start of the year compared to the 18.7% move for the Zacks Computer and Technology sector and the 3.8% return for the Zacks Instruments - Scientific 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 July 30, 2020, Mettler-Toledo reported EPS of $5.29 versus consensus estimate of $4.27 while it missed the consensus revenue estimate by 1.9%.
Mettler-Toledo 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Mettler-Toledo has a Value Score of D. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 43.6X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 34.7X versus its peer group's average of 16.1X. Additionally, the stock has a PEG ratio of 4.67. 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 consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Mettler-Toledo currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
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 Mettler-Toledo meets the list of requirements. Thus, it seems as though Mettler-Toledo shares could have a bit more room to run in the near term.
How Does Mettler-Toledo Stack Up to the Competition?
Shares of Mettler-Toledo 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 Intevac (IVAC), Ultra Clean Holdings (UCTT), and MKS Instruments (MKSI), 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 7% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Mettler-Toledo, even beyond its own solid fundamental situation.
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MettlerToledo International, Inc. (MTD) : Free Stock Analysis Report
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