Shares of SharkNinja, Inc. (SN) have been performing strongly lately, with the stock rising 27.8% over the past month. In the previous session, the stock hit a new 52-week high of $92.11. SharkNinja, Inc. has gained 78% year-to-date, compared to the -1.8% decline in the Zacks Consumer Discretionary sector and the 22.3% return in the Zacks Furniture sector.
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 8, 2024, SharkNinja, Inc. reported earnings per share of $0.71 versus a consensus estimate of $0.59.
For the current fiscal year, SharkNinja, Inc. is expected to report earnings of $4.22 per share on revenue of $5.18 billion, representing an EPS change of 31.06% on a revenue change of 21.88%. For the next fiscal year, the company is expected to report earnings of $4.81 per share on revenue of $5.68 billion, representing year-over-year changes of 14.19% and 9.54% respectively.
Evaluation metrics
SharkNinja, Inc. 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 the valuation metrics to see if the company has gotten ahead of itself.
In this context, we can look at the Zacks Style Scores, as these provide investors with a variety of ways to sift 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.
SharkNinja, Inc. has a Value Score of D. The stock’s Growth and Momentum Scores are B and B respectively, giving the company a VGM Score of B.
As for the value breakdown, the stock is currently trading at 21.6 times estimated earnings per share for the current fiscal year, which represents a premium to the industry average of 13.1. Based on trailing twelve-month cash flow, the stock is currently trading at 22.9 times estimated earnings per share, while the peer group average is 7.4. Additionally, the stock has a PEG ratio of 1.23. However, 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, SharkNinja, Inc. currently has a Zacks Rank of #2 (Buy), thanks to favorable earnings estimate revisions from analysts.
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 SharkNinja, Inc. fits the list of requirements. Therefore, it seems like SharkNinja, Inc. shares could have potential in the coming weeks and months.
How does SN compare to the competition?
SN shares have soared and the company still seems like a good pick, but what about the rest of the industry? One industry peer that is looking good is La-Z-Boy Incorporated (LZB)LZB has a Zacks Rank of #1 (Strong Buy) and a Value Score of A, a Growth Score of C and a Momentum Score of C.
Earnings last quarter were strong. La-Z-Boy Incorporated beat our consensus estimate by 39.71%. For the current fiscal year, LZB is expected to report earnings of $3.13 per share on revenue of $2.09 billion.
La-Z-Boy Incorporated shares have gained 0.8% over the past month and are currently trading at a forward P/E ratio of 13.41 and a forward P/B ratio of 7.05.
The furniture industry is in the top 19% of all industries in our universe, so it looks like there are some nice tailwinds for SN and LZB, even beyond their own solid fundamental situation.
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