Have you been paying attention to shares of Crescent Energy (CRGY – Free Report) ? Shares have been on the move with the stock up 8% over the past month. The stock hit a new 52-week high of $15.72 in the previous session. Crescent Energy has gained 7.6% since the start of the year compared to the 6% move for the Zacks Oils-Energy sector and the 68.5% return for the Zacks Alternative Energy – Other 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 November 4, 2024, Crescent Energy reported EPS of $0.39 versus consensus estimate of $0.28.
For the current fiscal year, Crescent Energy is expected to post earnings of $1.78 per share on $2.95 billion in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $2.04 per share on $3.67 billion in revenues. This represents a year-over-year change of 21.09% and 24.53%, respectively.
Valuation Metrics
Crescent Energy 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 they provide investors with an additional way to sort 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.
Crescent Energy has a Value Score of A. The stock’s Growth and Momentum Scores are C and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 8.9X current fiscal year EPS estimates, which is not in-line with the peer industry average of 18.1X. On a trailing cash flow basis, the stock currently trades at 3.2X versus its peer group’s average of 7.1X. 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, Crescent Energy 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 Crescent Energy fits the bill. Thus, it seems as though Crescent Energy shares could have potential in the weeks and months to come.
How Does CRGY Stack Up to the Competition?
Shares of CRGY 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 Kolibri Global Energy Inc. (KGEI – Free Report) . KGEI has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of C, and a Momentum Score of C.
Earnings were strong last quarter. Kolibri Global Energy Inc. beat our consensus estimate by 22.22%, and for the current fiscal year, KGEI is expected to post earnings of $0.57 per share on revenue of $58.03 million.
Shares of Kolibri Global Energy Inc. have gained 28.8% over the past month, and currently trade at a forward P/E of 10.62X and a P/CF of 5.88X.
The Alternative Energy – Other industry is in the top 37% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CRGY and KGEI, even beyond their own solid fundamental situation.
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