Knowing facts before you bet on it

Abercrombie & Fitch (Beginning) is one of the stocks that have recently been viewed by zacks.com visitors. So it could be a good idea to check some of the factors that could influence the short -term performance of the share.

Last month, the shares of this retailer for teenage clothing +15.5% returned, compared to the Zacks S&P 500 Composits's +9.9%. During this time, the Zack's retail clothing and shoe industry, which Abercrombie falls, has increased by 25.6%. The key question now is: What could be the future direction of the stock?

While media publications or rumors about a significant change in the business prospects of a company usually carry out its shares as a “trend” and lead to an immediate change in price, there are always some basic facts that ultimately dominate the purchase and hate decision finding.

Here at Zacks we prioritize the evaluation of the change in the projection of the future income of a company above all. This is because we believe that the current value of his future profit current determines the current value for its shares.

Our analysis essentially is based on how the analysts of sales pages that cover the shares revises their profit estimates in order to take into account the latest business trends. If the profit estimates for a company increase, the at the time to be accompanied by the current value for its shares. And if the at the time value of a share to be added is higher than the current market price, investors tend to buy the shares, which means that the price is upwards. For this reason, empirical studies indicate a strong correlation between trends in estimating the profits and the short -term share price movements.

Abercrombie is expected to make a profit of USD 1.42 per share in the current quarter, which corresponds to a change of -33.6%compared to the previous year. In the past 30 days, the Zacks Consensus estimate has changed by -1%.

The consensus result estimate of $ 10.96 for the current financial year shows a change of +2.5%compared to the previous year. This estimate has changed by -0.9% in the past 30 days.

For the next financial year, the consensus assessment of $ 11.47 shows a change of +4.6% compared to what Abercrombie will expect a year ago. Last month the estimate changed -1.9%.

With an impressive externally tested track balance sheet, our proprietary stock assessment tool and the Zacks-Rank-Rank-Rank-Rank-Rank is more conclusive for the short-term price-performance of a share, since it effectively uses the power of the profit assessment revisions. The size of the recent change in the consensus estimate and three other factors in connection with the profit estimates led to a Zacks rank 4 (sale) for Abercrombie.

The following table shows the development of the company's 12-month consensus EPS EPS estimate:

12-month consensus EPS estimate for ANF _12Monthepscharturl

While profit growth is probably the most superior indicator of a company's financial health, nothing happens than such if a company cannot increase its income. After all, it is almost impossible for a company to increase its income over a longer period of time without increasing its income. It is therefore important to know the potential sales growth of a company.

For Abercrombie, the consensus sales for the current quarter of USD 1.07 billion shows a change of +5.3%compared to the previous year. For the current and next financial years, estimates of 5.16 billion US dollars and 5.34 billion US dollars +4.2% or +3.6% make changes.

In the last reported quarter, Abercrombie achieved sales of $ 1.58 billion, which corresponds to a change of +9.1%compared to the previous year. EPS of USD 3.57 for the same period comparable to USD 2.97 a year ago.

Compared to the Zacks Consensus estimate of 1.56 billion US dollars, the registered income is a surprise of +1.46%. The EPS surprise was +2.59%.

The company defeated consensus -epseps estimates in each of the following four quarters. The company exceeded consensus sales every time.

No investment decision can be efficient without taking into account the evaluation of a share. Whether the current price of a share rightly reflects the internal value of the underlying business and the growth prospects of the company is an essential determinant for future price -performance.

The comparison of the current value of the valuation multipliers of a company, such as

The Zacks Value Style Score (part of the Zacks Style Scores Systems), which pays attention to the grade of stocks from A to F both traditional and unconventional valuation metrics (AA is better than a C; and so on) is rather helpful to identify whether a share is overrated, legally valued or temporarily accommodated.

Abercrombie is an A value on this front, which points out that it is about his colleagues with a discount. Click here to display the values of some evaluation metrics that have driven this grade.

The facts discussed here and a lot of other information about Zacks.com could help determine whether it is worth paying attention to the Abercrombie market or not. However, his Zack's rank # 4 suggests that it affects the wider market below average at short notice.

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Abercrombie & Fitch Company (ANF): Free stock analysis report

This article was originally published in Zack's Investment Research (Zacks.com).

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