Livent Shows Strong Performance in Recent Month
Livent (LTHM) has been making headlines as one of the most searched-for stocks on Zacks.com. With a return of +30.9% in the past month, Livent has outperformed the Zacks S&P 500 composite index, which has only seen a +4.7% change. This is a significant increase compared to the 4.3% gain in the Zacks Chemical – Specialty industry, where Livent falls under.
Earnings Estimate Revisions
At Zacks, we prioritize analyzing the change in a company’s future earnings projection over anything else. This is because we believe that the present value of its future stream of earnings is what determines the fair value for its stock. Our analysis is based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock also increases. This results in investors buying the stock, causing its price to move upward. Empirical studies have shown a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, Livent is expected to post earnings of $0.36 per share, indicating a change of -10% from the year-ago quarter. The Zacks Consensus Estimate has changed -8% over the last 30 days. For the current fiscal year, the consensus earnings estimate of $1.89 points to a change of +35% from the prior year. Over the last 30 days, this estimate has changed -2.1%. For the next fiscal year, the consensus earnings estimate of $1.63 indicates a change of -13.9% from what Livent reported a year ago. Over the past month, the estimate has changed -7.4%. With a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of Livent’s stock price direction in the near term, as it effectively harnesses the power of earnings estimate revisions. Due to the recent change in the consensus estimate, along with three other factors related to earnings estimates, Livent is rated Zacks Rank #3 (Hold). The chart below shows the evolution of the company’s forward 12-month consensus EPS estimate.
12 Month EPS Projected Revenue Growth
While earnings growth is an important indicator of a company’s financial health, it is equally important for a business to be able to grow its revenues. After all, it is nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. Therefore, it is crucial to know a company’s potential revenue growth. For Livent, the consensus sales estimate for the current quarter of $209.97 million indicates a year-over-year change of -4.3%. For the current and next fiscal years, $907.37 million and $986.83 million estimates indicate +11.6% and +8.8% changes, respectively.
Last Reported Results and Surprise History
In the last reported quarter, Livent reported revenues of $211.4 million, representing a year-over-year change of -8.7%. EPS of $0.44 for the same period compares with $0.41 a year ago. Compared to the Zacks Consensus Estimate of $268.86 million, the reported revenues represent a surprise of -21.37%. The EPS surprise was -4.35%. Over the last four quarters, Livent has beaten the Zacks Consensus Estimate three times and missed it once.
Livent (LTHM) has shown strong performance in the past month, outperforming the market and its industry.
