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Have you been paying attention to shares of AxoGen (AXGN)? Shares have been on the move with the stock up 27.5% over the past month. The stock hit a new 52-week high of $18.4 in the previous session. AxoGen has gained 9.5% since the start of the year compared to the -4.5% move for the Zacks Medical sector and the 6.5% return for the Zacks Medical - Instruments 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 7, 2024, AxoGen reported EPS of $0.07 versus consensus estimate of $0 while it beat the consensus revenue estimate by 3.5%.
For the current fiscal year, AxoGen is expected to post earnings of $0.31 per share on $185.2 million in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $0.48 per share on $208.47 million in revenues. This represents a year-over-year change of 251.85% and 12.56%, respectively.
Valuation Metrics
AxoGen 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 is due for a pullback from this level.
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.
AxoGen has a Value Score of D. 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 57.6X current fiscal year EPS estimates, which is a premium to the peer industry average of 27.6X. On a trailing cash flow basis, the stock currently trades at 5X versus its peer group's average of 16.8X. 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 consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, AxoGen currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
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 AxoGen meets the list of requirements. Thus, it seems as though AxoGen shares could have a bit more room to run in the near term.