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StoneX Group Inc. (SNEX) Soars to 52-Week High, Time to Cash Out?

Have you been paying attention to shares of StoneX Group Inc. (SNEX)? Shares have been on the move with the stock up 11.3% over the past month. The stock hit a new 52-week high of $103 in the previous session. StoneX Group Inc. has gained 68.1% since the start of the year compared to the -10.1% move for the Zacks Finance sector and the -16.4% return for the Zacks Financial - Miscellaneous Services 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 November 21, 2022, StoneX Group Inc. reported EPS of $2.49 versus consensus estimate of $1.93 while it beat the consensus revenue estimate by 12.6%.

For the current fiscal year, StoneX Group Inc. is expected to post earnings of $8.71 per share on $2.12 billion in revenues. This represents a -12.99% change in EPS on a 7.82% change in revenues. For the next fiscal year, the company is expected to earn $8.95 per share on $2.12 billion in revenues. This represents a year-over-year change of 2.76% and 0.32%, respectively.

Valuation Metrics

StoneX Group 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 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.

StoneX Group Inc. has a Value Score of C. 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 11.8X current fiscal year EPS estimates, which is a premium to the peer industry average of 10.3X. On a trailing cash flow basis, the stock currently trades at 7.1X versus its peer group's average of 7.2X. 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, StoneX Group 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 StoneX Group Inc. passes the test. Thus, it seems as though StoneX Group Inc. shares could have potential in the weeks and months to come.

How Does SNEX Stack Up to the Competition?

Shares of SNEX 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 Midwest Holding Inc. (MDWT). MDWT has a Zacks Rank of # 1 (Strong Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of A.

Earnings were strong last quarter. Midwest Holding Inc. beat our consensus estimate by 844.44%, and for the current fiscal year, MDWT is expected to post earnings of $1.80 per share on revenue of $61.2 million.

Shares of Midwest Holding Inc. have gained 7.8% over the past month, and currently trade at a forward P/E of 9.87X and a P/CF of 555.19X.

The Financial - Miscellaneous Services industry may rank in the bottom 54% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for SNEX and MDWT, even beyond their own solid fundamental situation.

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