Stantec Inc. (STN) Hit a 52 Week High, Can the Run Continue?

Have you been paying attention to shares of Stantec (STN)? Shares have been on the move with the stock up 6.2% over the past month. The stock hit a new 52-week high of $90.29 in the previous session. Stantec has gained 14.6% since the start of the year compared to the -1.2% move for the Zacks Business Services sector and the -6.5% return for the Zacks Consulting 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 February 25, 2025, Stantec reported EPS of $0.79 versus consensus estimate of $0.69 while it beat the consensus revenue estimate by 4.49%.For the current fiscal year, Stantec is expected to post earnings of $3.74 per share on $4.65 billion in revenues. This represents a 15.79% change in EPS on an 8.7% change in revenues. For the next fiscal year, the company is expected to earn $4.20 per share on $5.08 billion in revenues. This represents a year-over-year change of 12.43% and 9.23%, respectively.Valuation MetricsStantec 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.Stantec has a Value Score of C. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of A.In terms of its value breakdown, the stock currently trades at 24.1X current fiscal year EPS estimates, which is a premium to the peer industry average of 20.7X. On a trailing cash flow basis, the stock currently trades at 17.1X versus its peer group's average of 17.1X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.Zacks RankWe also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Stantec 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 Stantec passes the test. Thus, it seems as though Stantec shares could have a bit more room to run in the near term.How Does STN Stack Up to the Competition?Shares of STN 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 Information Services Group, Inc. (III). III has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of F.Earnings were strong last quarter. Information Services Group, Inc. beat our consensus estimate by 20%, and for the current fiscal year, III is expected to post earnings of $0.27 per share on revenue of $241.16 million.Shares of Information Services Group, Inc. have gained 1.6% over the past month, and currently trade at a forward P/E of 13.94X and a P/CF of 16.76X.The Consulting Services industry is in the top 11% of all the industries we have in our universe, so it looks like there are some nice tailwinds for STN and III, even beyond their own solid fundamental situation.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Stantec Inc. (STN): Free Stock Analysis Report Information Services Group, Inc. (III): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks