Can Perficient (PRFT) Run Higher on Rising Earnings Estimates?
Perficient (PRFT) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.
Analysts' growing optimism on the earnings prospects of this information technology consulting firm is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
For Perficient, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.
The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:
12 Month EPS
Current-Quarter Estimate Revisions
For the current quarter, the company is expected to earn $0.86 per share, which is a change of +28.36% from the year-ago reported number.
Over the last 30 days, four estimates have moved higher for Perficient compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 10%.
Current-Year Estimate Revisions
The company is expected to earn $3.29 per share for the full year, which represents a change of +31.6% from the prior-year number.
There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, four estimates have moved up for Perficient versus no negative revisions. This has pushed the consensus estimate 6.07% higher.
Favorable Zacks Rank
The promising estimate revisions have helped Perficient earn a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
Bottom Line
While strong estimate revisions for Perficient have attracted decent investments and pushed the stock 24.5% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Perficient, Inc. (PRFT) : Free Stock Analysis Report
To read this article on Zacks.com click here.
