UNFI or MKC: Which Is the Better Value Stock Right Now?
Have you been paying attention to shares of ICU Medical, Inc. ICUI? Shares have been on the move with the stock up 15.75% over the past month. ICUI hit a new 52-week high of $265.28 in the previous session. ICU Medical has gained 18.22% since the start of the year compared to the 4.48% move for the Medical sector and the 7.31% year-to-date return for its peer group.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on March 1, 2018, ICU Medical reported EPS of $2.98 versus the Zacks Consensus Estimate of $0.98 while it beat the consensus revenue estimate by 12.4%.
For the current fiscal year, ICU Medical is expected to post earnings of $7 per share on $1.37 billion in revenues. This represents an 8.53% change in EPS on a 5.72% change in revenues. For the next fiscal year, the company is expected to earn $8.84 per share on $1.42 billion in revenues. This represents changes of 26.29% and 3.78%, respectively.
ICU Medical may be at a 52-week-high right now, but what might the future hold for ICUI? 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
ICU Medical has a Value Score of D. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 36.46x current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 49.95x versus its peer group's average of 20.06x. Additionally, the stock has a PEG ratio of 2.31. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
ICU Medical, Inc. Price and Consensus
ICU Medical, Inc. Price and Consensus | ICU Medical, Inc. Quote
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, ICU Medical currently has a Zacks Rank of #2 (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 and Style Scores of A or B, it looks as if ICU Medical fits the bill. Thus, it seems as though ICUI shares could still be poised for more gains ahead.
How Does ICU Medical Stack Up to the Competition?
Shares of ICU Medical have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also looking good, including PAHC, VAR, and ATHN, all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
However, it is worth noting that the Zacks Industry Rank for this group is in the bottom half of the ranking, so it isn't all good news for ICU Medical. Still, the fundamentals for ICUI are promising, and it still has potential despite being at a 52-week high.
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