core and main (CNM – (Free Report) recently appeared on the list of most searched stocks on Zacks.com. Therefore, you may need to consider some important factors that may influence the stock’s performance in the near future.
Shares of this distributor of water and fire protection products have risen +1.8% over the past month. In comparison, the Zacks S&P 500 Composite Index was -1.1%. The Zacks Waste Removal Services industry, which includes Core & Main, has declined 1.5% in this period. The key question here is where the stock is likely to go in the short term.
While media releases and rumors about significant changes in a company’s business prospects typically cause its stock to “trend” and lead to immediate price movements, there are some fundamentals that ultimately govern buy-and-hold decisions. There are always facts.
Regarding revisions to performance forecasts
Zacks prioritizes evaluating changes in a company’s future earnings expectations above all else. That’s because we believe that the present value of future income streams determines the fair value of a stock.
Essentially, we look at how the sell-side analysts covering a stock are revising their earnings estimates to reflect the impact of the latest business trends. And as a company’s earnings expectations rise, so will the fair value of its stock. If the fair value is higher than the current market price, investors will be more willing to buy the stock, causing the price to rise. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Core & Main is expected to post earnings of $0.51 per share for the current quarter, representing a +2% change from the year-ago period. Over the past 30 days, the Zacks Consensus Estimate has changed by -8.1%.
The current year’s consensus earnings estimate of $2.59 represents a +20.5% change from the prior year. Over the past 30 days, this estimate has changed by +5.4%.
Next year’s consensus earnings estimate of $2.77 represents a +6.8% change from what Core & Main would have reported a year ago. Over the past month, the forecast has changed by -2.5%.
The Zacks Rank, a proprietary stock evaluation tool with an impressive, outside-audited track record of impressive results, leverages the power of earnings estimate revisions to be a more conclusive indicator of a stock’s short-term price performance. . The magnitude of the recent consensus estimate change, along with three other factors related to the earnings estimate, earns the Zacks Core & Main sector a #1 (Strong Buy) Rank.
The chart below shows the company’s consensus EPS estimate over the next 12 months over time.
12 months EPS
Expected revenue growth rate
There’s no question that a company’s profit growth is the best indicator of its financial health, but nothing will happen if it doesn’t make a profit. It’s nearly impossible for a company to expand its bottom line without growing it over the long term. Therefore, it’s important to know a company’s earnings growth potential.
Core & Main’s current quarterly consensus revenue estimate is $1.72 billion, representing a year-over-year change of +9.3%. Estimates for the current and next fiscal year are $7.54 billion and $7.87 billion, representing changes of +12.6% and +4.4%, respectively.
Last reported results and surprising details
Core & Main reported revenue of $1.44 billion in its last reported quarter. This corresponds to a +4.8% year-on-year change. EPS for the same period was $0.34, compared to $0.31 a year ago.
The reported earnings represent a surprise of +0.41% when compared to the Zacks Consensus Estimate of $1.43 billion. EPS surprise was 0%.
Over the last four quarters, Core & Main has surpassed consensus EPS estimates two times. The company surpassed consensus revenue estimates two times during the period.
evaluation
You cannot make efficient investment decisions without considering stock valuation. To predict a stock’s future price performance, it is important to determine whether the current price accurately reflects the intrinsic value of the underlying business and the company’s growth prospects.
Compare the current value of a company’s valuation multiples, such as price to earnings (P/E), price to sales (P/S), and price to cash flow (P/CF), to its own value, while also Value helps determine whether a stock is fairly valued, overvalued, or undervalued, and by comparing a company to its peers based on these parameters, you can determine whether a stock is reasonably priced. I can understand the gender.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and non-traditional valuation metrics) categorizes stocks into five groups, ranging from A to F (A is better than B, B is better than C, and so on) to identify whether a stock is overvalued, fairly valued, or temporarily undervalued. Helpful.
Core & Main is rated B on this score, indicating that it trades at a discount to its peers. Click here to see the values of several metrics that determined this grade.
conclusion
The facts discussed here, and many others on Zacks.com, may help you decide whether the market buzz regarding Core and Main is worth paying attention to. However, the company’s Zacks Rank #1 suggests it has the potential to outperform the broader market in the short term.
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