Shares of Vita Coco Company, Inc. (COCO) have been strong performers lately, with the stock up 15.4% over the past month. The stock hit a new 52-week high of $39.74 in the previous session. Vita Coco Company, Inc. has gained 6.7% since the start of the year compared to the -0.5% move for the Zacks Consumer Staples sector and the -0.1% return for the Zacks Beverages - Soft drinks 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 October 30, 2024, Vita Coco Company reported EPS of $0.32 versus consensus estimate of $0.27.

For the current fiscal year, Vita Coco Company is expected to post earnings of $1.16 per share on $512.06 million in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $1.38 per share on $569.13 million in revenues. This represents a year-over-year change of 21.35% and 11.15%, respectively.

Valuation Metrics

Vita Coco Company 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.

Vita Coco Company has a Value Score of D. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 33.8X current fiscal year EPS estimates, which is a premium to the peer industry average of 18X. On a trailing cash flow basis, the stock currently trades at 50.7X versus its peer group's average of 16.6X. Additionally, the stock has a PEG ratio of 2.36. 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, Vita Coco Company 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 Vita Coco Company meets the list of requirements. Thus, it seems as though Vita Coco Company shares could still be poised for more gains ahead.

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