Yahoo Finance Chuy's Holdings, Inc. (CHUY) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Chuy's Holdings (CHUY)? Shares have been on the move with the stock up 14.2% over the past month. The stock hit a new 52-week high of $40.14 in the previous session. Chuy's Holdings has gained 41.5% since the start of the year compared to the 11.4% move for the Zacks Retail-Wholesale sector and the 10.5% return for the Zacks Retail - Restaurants 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 May 4, 2023, Chuy's reported EPS of $0.47 versus consensus estimate of $0.37 while it beat the consensus revenue estimate by 2.16%.
For the current fiscal year, Chuy's is expected to post earnings of $1.71 per share on $463.82 million in revenues. This represents a 24.82% change in EPS on a 9.85% change in revenues. For the next fiscal year, the company is expected to earn $1.80 per share on $496.29 million in revenues. This represents a year-over-year change of 5.85% and 7%, respectively.
Valuation Metrics
Chuy's 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. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Chuy's has a Value Score of B. The stock's Growth and Momentum Scores are B and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 23.5X current fiscal year EPS estimates, which is not in-line with the peer industry average of 23.5X. On a trailing cash flow basis, the stock currently trades at 12.9X versus its peer group's average of 14.1X. 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 consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Chuy's 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 Chuy's passes the test. Thus, it seems as though Chuy's shares could have potential in the weeks and months to come.
How Does CHUY Stack Up to the Competition?
Shares of CHUY 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 Arcos Dorados Holdings Inc. (ARCO). ARCO has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of B.
Earnings were strong last quarter. Arcos Dorados Holdings Inc. beat our consensus estimate by 50%, and for the current fiscal year, ARCO is expected to post earnings of $0.72 per share on revenue of $4.08 billion.
Shares of Arcos Dorados Holdings Inc. have gained 7.2% over the past month, and currently trade at a forward P/E of 12.44X and a P/CF of 7.13X.
The Retail - Restaurants industry is in the top 21% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CHUY and ARCO, even beyond their own solid fundamental situation.
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Chuy's Holdings, Inc. (CHUY) : Free Stock Analysis Report
Arcos Dorados Holdings Inc. (ARCO) : Free Stock Analysis Report
