Mercury General Corporation (MCY) Hits Fresh High: Is There Still Room to Run?

Have you been paying attention to shares of Mercury General (MCY)? Shares have been on the move with the stock up 13.5% over the past month. The stock hit a new 52-week high of $74.2 in the previous session. Mercury General has gained 97.9% since the start of the year compared to the 23.8% move for the Zacks Finance sector and the 29.6% return for the Zacks Insurance - Property and Casualty 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 29, 2024, Mercury General reported EPS of $2.54 versus consensus estimate of $1.15 while it beat the consensus revenue estimate by 3.51%.For the current fiscal year, Mercury General is expected to post earnings of $6.35 per share on $5.35 billion in revenues. This represents a 2016.67% change in EPS on a 18.23% change in revenues. For the next fiscal year, the company is expected to earn $6.90 per share on $5.85 billion in revenues. This represents a year-over-year change of 8.66% and 9.17%, respectively.Valuation MetricsMercury General 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.Mercury General has a Value Score of B. 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 11.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 14.1X. On a trailing cash flow basis, the stock currently trades at 5X versus its peer group's average of 13.8X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.Zacks RankWe also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Mercury General 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 Mercury General passes the test. Thus, it seems as though Mercury General shares could still be poised for more gains ahead.Free Report: 5 Clean Energy Stocks with Massive UpsideEnergy is the backbone of our economy. It’s a multi-trillion dollar industry that has created some of the world’s largest and most profitable companies.Now state-of-the-art technology is paving the way for clean energy sources to overtake “old-fashioned” fossil fuels. Trillions of dollars are already pouring into clean energy initiatives, from solar power to hydrogen fuel cells.Emerging leaders from this space could be some of the most exciting stocks in your portfolio.Download Nuclear to Solar: 5 Stocks Powering the Future to see Zacks’ top picks free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Mercury General Corporation (MCY): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks