Have you invested in the shares of Atmus Filtration Technologies (ATMU)? Shares are on the move, with the stock up 9.5% over the past month. In the previous session, the stock hit a new 52-week high of $34.2. Atmus Filtration Technologies has gained 44% year-to-date, compared to a 5.8% gain for the Zacks Industrial Products sector and a 24.2% return for the Zacks Pollution Control industry.
What is the reason for this outperformance?
The stock has a long track record of positive earnings surprises, having never missed our consensus estimates in any of the last four quarters. In its last earnings report on August 2, 2024, Atmus Filtration reported earnings per share of $0.71 versus a consensus estimate of $0.58, while it beat the consensus estimate for revenue by 3.72%.
For the current fiscal year, Atmus Filtration is expected to report earnings of $2.33 per share on revenue of $1.67 billion, representing an EPS change of 0.87% on a revenue change of 2.43%. For the next fiscal year, the company is expected to report $2.47 per share on revenue of $1.71 billion, representing year-over-year changes of 6.12% and 2.82% respectively.
Evaluation metrics
Atmus Filtration may have currently hit a 52-week high, but what could the future hold for the stock? An important aspect of this question is to look at valuation metrics to determine if the company will fall back from these levels.
In this context, we can look at the Zacks Style Scores as they provide investors with an additional way to sort through stocks (beyond looking at a security’s Zacks Rank). These styles are represented by grades ranging from A to F in the Value, Growth and Momentum categories, with a combined VGM score also available. The idea behind the Style Scores is to help investors select the most appropriate Zacks Rank stocks based on their individual investment style.
Atmus Filtration has a Value Score of B. The stock’s Growth and Momentum Scores are C and D, respectively, giving the company a VGM Score of B.
As for the value breakdown, the stock is currently trading at 14.5 times estimated earnings per share for the current fiscal year, which is out of step with the industry average of 28.8. Based on trailing twelve-month cash flow, the stock is currently trading at 13.1 times estimated earnings per share, while the peer group average is 21.6. Additionally, the stock has a PEG ratio of 3.87, but this is not enough to put the company in the top league of all the stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this overrides any trend related to the style score. Fortunately, thanks to rising earnings estimates, Atmus Filtration currently has a Zacks Rank of #2 (Buy).
Since we recommend investors to pick stocks with Zacks Rank #1 (Strong Buy) or #2 (Buy) and Style Scores of A or B, it looks like Atmus Filtration passes the test. Therefore, it seems like Atmus Filtration shares may have a little more room to move up in the near future.
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Atmus Filtration Technologies Inc. (ATMU): Free Stock Analysis Report
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