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Have you been paying attention to shares of Telephone & Data Systems (TDS)? Shares have been on the move with the stock up 4.9% over the past month. The stock hit a new 52-week high of $36.66 in the previous session. Telephone & Data Systems has gained 4.9% since the start of the year compared to the 8.7% move for the Zacks Utilities sector and the 95% return for the Zacks Wireline - National 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 November 1, 2024, TDS reported EPS of $0.01 versus consensus estimate of $-0.14.
For the current fiscal year, TDS is expected to post earnings of -$0.20 per share on $4.95 billion in revenues. Meanwhile, for the next fiscal year, the company is expected to earn -$0.15 per share on $4.77 billion in revenues. This represents a year-over-year change of 81.27% and -3.6%, respectively.
Valuation Metrics
TDS 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
TDS 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.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, TDS currently has a Zacks Rank of #1 (Strong 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 TDS meets the list of requirements. Thus, it seems as though TDS shares could have a bit more room to run in the near term.
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Telephone and Data Systems, Inc. (TDS) : Free Stock Analysis Report