Have you been paying attention to shares of AxoGen (AXGN)? Shares have been on the move with the stock up 27.6% over the past month. The stock hit a new 52-week high of $17.23 in the previous session. AxoGen has gained 151.7% since the start of the year compared to the -4% move for the Zacks Medical sector and the 4.5% 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 $0.09 per share on $185.43 million in revenues. This represents a 152.94% change in EPS on a 16.62% change in revenues. For the next fiscal year, the company is expected to earn $0.31 per share on $208.47 million in revenues. This represents a year-over-year change of 251.85% and 12.42%, 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. The idea behind the style scores is to help investors 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 198.4X current fiscal year EPS estimates, which is a premium to the peer industry average of 28.5X. On a trailing cash flow basis, the stock currently trades at 5X versus its peer group's average of 17X. 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 look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, AxoGen 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 (Buy) and Style Scores of A or B, it looks as if AxoGen passes the test. Thus, it seems as though AxoGen shares could still be poised for more gains ahead.
How Does AXGN Stack Up to the Competition?
Shares of AXGN have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Fresenius Medical Care AG & Co. KGaA (FMS). FMS has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of C, and a Momentum Score of A.
Earnings were strong last quarter. Fresenius Medical Care AG & Co. KGaA beat our consensus estimate by 7.14%, and for the current fiscal year, FMS is expected to post earnings of $1.94 per share on revenue of $20.88 billion.
Shares of Fresenius Medical Care AG & Co. KGaA have gained 0.5% over the past month, and currently trade at a forward P/E of 14.66X and a P/CF of 4.9X.
The Medical - Instruments industry is in the top 22% of all the industries we have in our universe, so it looks like there are some nice tailwinds for AXGN and FMS, even beyond their own solid fundamental situation.
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Fresenius Medical Care AG & Co. KGaA (FMS) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
