Tecnoglass Inc. (TGLS) Hit a 52 Week High, Can the Run Continue?
Shares of Tecnoglass (TGLS) have been strong performers lately, with the stock up 18.6% over the past month. The stock hit a new 52-week high of $32.7 in the previous session. Tecnoglass has gained 22.2% since the start of the year compared to the -24.1% move for the Zacks Retail-Wholesale sector and the -17.1% return for the Zacks Building Products - Retail 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 3, 2022, Tecnoglass reported EPS of $1.01 versus consensus estimate of $0.71.
For the current fiscal year, Tecnoglass is expected to post earnings of $3.17 per share on $709.61 million in revenues. This represents an 82.18% change in EPS on a 43.41% change in revenues. For the next fiscal year, the company is expected to earn $3.46 per share on $788.73 million in revenues. This represents a year-over-year change of 9.04% and 11.15%, respectively.
Valuation Metrics
Tecnoglass 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. 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.
Tecnoglass 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 B.
In terms of its value breakdown, the stock currently trades at 10.1X current fiscal year EPS estimates, which is not in-line with the peer industry average of 10.1X. On a trailing cash flow basis, the stock currently trades at 14.7X 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.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Tecnoglass currently has a Zacks Rank of #1 (Strong 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 Tecnoglass meets the list of requirements. Thus, it seems as though Tecnoglass shares could have a bit more room to run in the near term.
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Tecnoglass Inc. (TGLS) : Free Stock Analysis Report
