Earnings Estimates Moving Higher for Montrose Environmental (MEG): Time to Buy?
Montrose Environmental (MEG) appears an attractive pick given a noticeable improvement in the company’s earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.
Analysts’ growing optimism on the earnings prospects of this company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool — the Zacks Rank — has this insight at its core.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
For Montrose Environmental, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.
The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:
12 Month EPS
Current-Quarter Estimate Revisions
For the current quarter, the company is expected to earn $0.35 per share, which is a change of -14.6% from the year-ago reported number.
Over the last 30 days, one estimate has moved higher for Montrose Environmental compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 10.26%.
Current-Year Estimate Revisions
The company is expected to earn $1.34 per share for the full year, which represents a change of +24.1% from the prior-year number.
There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, one estimate has moved up for Montrose Environmental versus no negative revisions. This has pushed the consensus estimate 33.06% higher.
Favorable Zacks Rank
Thanks to promising estimate revisions, Montrose Environmental currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
Bottom Line
Investors have been betting on Montrose Environmental because of its solid estimate revisions, as evident from the stock’s 5.2% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.
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Montrose Environmental Group, Inc. (MEG) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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