Have you been paying attention to shares of Victoria's Secret (VSCO)? Shares have been on the move with the stock up 37.4% over the past month. The stock hit a new 52-week high of $48.7 in the previous session. Victoria's Secret has gained 80.9% since the start of the year compared to the 34.6% move for the Zacks Retail-Wholesale sector and the 29.9% return for the Zacks Retail - Apparel and Shoes 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 December 5, 2024, Victoria's Secret reported EPS of $-0.5 versus consensus estimate of $-0.64.

Valuation Metrics

While Victoria's Secret has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? 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. 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.

Victoria's Secret has a Value Score of A. 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 23.9X current fiscal year EPS estimates, which is a premium to the peer industry average of 17.5X. On a trailing cash flow basis, the stock currently trades at 7.6X versus its peer group's average of 7.7X. 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, Victoria's Secret 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 Victoria's Secret fits the bill. Thus, it seems as though Victoria's Secret shares could still be poised for more gains ahead.

How Does VSCO Stack Up to the Competition?

Shares of VSCO 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 Genesco Inc. (GCO). GCO has a Zacks Rank of # 1 (Strong Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of A.

Earnings were strong last quarter. Genesco Inc. beat our consensus estimate by 103.33%, and for the current fiscal year, GCO is expected to post earnings of $1.81 per share on revenue of $2.29 billion.

Shares of Genesco Inc. have gained 41.1% over the past month, and currently trade at a forward P/E of 54.24X and a P/CF of 5.58X.

The Retail - Apparel and Shoes industry is in the top 30% of all the industries we have in our universe, so it looks like there are some nice tailwinds for VSCO and GCO, even beyond their own solid fundamental situation.

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