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Have you been paying attention to shares of National Bank Holdings (NBHC)? Shares have been on the move with the stock up 6.9% over the past month. The stock hit a new 52-week high of $44.88 in the previous session. National Bank Holdings has gained 36.4% since the start of the year compared to the 26.2% move for the Zacks Finance sector and the 45.1% return for the Zacks Banks - Southeast 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 19, 2021, National Bank Holdings reported EPS of $0.64 versus consensus estimate of $0.63 while it beat the consensus revenue estimate by 10.55%.
For the current fiscal year, National Bank Holdings is expected to post earnings of $2.88 per share on $289.22 million in revenues. This represents a -1.03% change in EPS on a -13.2% change in revenues. For the next fiscal year, the company is expected to earn $2.57 per share on $283.37 million in revenues. This represents a year-over-year change of -10.65% and -2.02%, respectively.
National Bank Holdings 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 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. 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.
National Bank Holdings has a Value Score of B. The stock's Growth and Momentum Scores are C and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 15.5X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 12.6X versus its peer group's average of 13.3X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, National Bank Holdings 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 National Bank Holdings fits the bill. Thus, it seems as though National Bank Holdings shares could have a bit more room to run in the near term.
How Does National Bank Holdings Stack Up to the Competition?
Shares of National Bank Holdings have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also solid potential picks, including United Bankshares (UBSI), Chemung Financial (CHMG), and Southern First Bancshares (SFST), all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 17% of all the industries we have in our universe, so it looks like there are some nice tailwinds for National Bank Holdings, even beyond its own solid fundamental situation.
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National Bank Holdings Corporation (NBHC) : Free Stock Analysis Report
United Bankshares, Inc. (UBSI) : Free Stock Analysis Report
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