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Have you been paying attention to shares of Brainsway Ltd. Sponsored ADR (BWAY)? Shares have been on the move with the stock up 18.2% over the past month. The stock hit a new 52-week high of $11.09 in the previous session. Brainsway Ltd. Sponsored ADR has gained 17.2% since the start of the year compared to the -3.2% move for the Zacks Medical sector and the 17.1% return for the Zacks Medical - Products 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 12, 2024, Brainsway reported EPS of $0.04 versus consensus estimate of $0.01 while it beat the consensus revenue estimate by 4.33%.

For the current fiscal year, Brainsway is expected to post earnings of $0.16 per share on $40.41 million in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $0.21 per share on $46.38 million in revenues. This represents a year-over-year change of 93.75% and 14.78%, respectively.

Valuation Metrics

Brainsway 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 is due for a pullback from this level.

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.

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

In terms of its value breakdown, the stock currently trades at 71.3X current fiscal year EPS estimates, which is a premium to the peer industry average of 18.7X. On a trailing cash flow basis, the stock currently trades at 5X versus its peer group's average of 11.5X. 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, Brainsway currently has a Zacks Rank of #1 (Strong 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 Brainsway passes the test. Thus, it seems as though Brainsway shares could have a bit more room to run in the near term.

How Does BWAY Stack Up to the Competition?

Shares of BWAY have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is ResMed Inc. (RMD). RMD has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of D.

Earnings were strong last quarter. ResMed Inc. beat our consensus estimate by 8.37%, and for the current fiscal year, RMD is expected to post earnings of $9.35 per share on revenue of $5.1 billion.

Shares of ResMed Inc. have gained 6.5% over the past month, and currently trade at a forward P/E of 26.5X and a P/CF of 26.85X.

The Medical - Products industry is in the top 38% of all the industries we have in our universe, so it looks like there are some nice tailwinds for BWAY and RMD, even beyond their own solid fundamental situation.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.