Have you been paying attention to shares of FMC Technologies (FTI)? Shares have been on the move with the stock up 16.1% over the past month. The stock hit a new 52-week high of $30.23 in the previous session. FMC Technologies has gained 49.1% since the start of the year compared to the 11.3% move for the Zacks Oils-Energy sector and the 3.1% return for the Zacks Oil and Gas - Field Services industry.
What's Driving the Outperformance?
The stock has a great 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 October 24, 2024, FMC Technologies reported EPS of $0.64 versus consensus estimate of $0.39 while it beat the consensus revenue estimate by 0.3%.
For the current fiscal year, FMC Technologies is expected to post earnings of $1.56 per share on $9 billion in revenues. This represents a 246.67% change in EPS on a 15.01% change in revenues. For the next fiscal year, the company is expected to earn $1.97 per share on $9.82 billion in revenues. This represents a year-over-year change of 26.79% and 9.12%, respectively.
Valuation Metrics
FMC Technologies 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 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.
FMC Technologies has a Value Score of B. The stock's Growth and Momentum Scores are B and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 19.3X current fiscal year EPS estimates, which is not in-line with the peer industry average of 20.7X. On a trailing cash flow basis, the stock currently trades at 22.6X versus its peer group's average of 7.4X. 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, FMC Technologies 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 FMC Technologies passes the test. Thus, it seems as though FMC Technologies shares could still be poised for more gains ahead.
How Does FTI Stack Up to the Competition?
Shares of FTI 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 Flotek Industries, Inc. (FTK). FTK has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of B.
Earnings were strong last quarter. Flotek Industries, Inc. beat our consensus estimate by 14.29%, and for the current fiscal year, FTK is expected to post earnings of $0.43 per share on revenue of $189.1 million.
Shares of Flotek Industries, Inc. have gained 65.2% over the past month, and currently trade at a forward P/E of 27.79X and a P/CF of 334.38X.
The Oil and Gas - Field Services industry is in the top 33% of all the industries we have in our universe, so it looks like there are some nice tailwinds for FTI and FTK, even beyond their own solid fundamental situation.
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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.
