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Integer (ITGR) Hits Fresh High: Is There Still Room to Run?

Zacks Equity Research
·2-min read

Shares of Integer Holdings (ITGR) have been strong performers lately, with the stock up 2.7% over the past month. The stock hit a new 52-week high of $101.61 in the previous session. Integer Holdings has gained 20.6% since the start of the year compared to the -0.8% move for the Zacks Medical sector and the 9.5% return for the Zacks Medical - Instruments industry.

What's Driving the Outperformance?

The stock has an impressive 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 July 29, 2021, Integer reported EPS of $1.07 versus consensus estimate of $0.91 while it beat the consensus revenue estimate by 6.68%.

Valuation Metrics

Integer 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.

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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.

Integer has a Value Score of B. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 24.6X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 18.3X versus its peer group's average of 34.5X. 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, Integer 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 Integer passes the test. Thus, it seems as though Integer shares could still be poised for more gains ahead.


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