Have you been paying attention to shares of Dorman Products (DORM)? Shares have been on the move with the stock up 26.4% over the past month. The stock hit a new 52-week high of $138.15 in the previous session. Dorman Products has gained 65.1% since the start of the year compared to the -8.7% move for the Zacks Auto-Tires-Trucks sector and the -21% return for the Zacks Automotive - Replacement Parts industry.

What's Driving the Outperformance?

The stock has a great 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 31, 2024, Dorman Products reported EPS of $1.96 versus consensus estimate of $1.54 while it missed the consensus revenue estimate by 1.33%.

For the current fiscal year, Dorman Products is expected to post earnings of $6.90 per share on $2 billion in revenues. This represents a 51.98% change in EPS on a 3.66% change in revenues. For the next fiscal year, the company is expected to earn $7.54 per share on $2.09 billion in revenues. This represents a year-over-year change of 9.23% and 4.24%, respectively.

Valuation Metrics

Dorman Products 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.

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

In terms of its value breakdown, the stock currently trades at 20X current fiscal year EPS estimates, which is a premium to the peer industry average of 16.4X. On a trailing cash flow basis, the stock currently trades at 21.9X versus its peer group's average of 11.8X. 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, Dorman Products currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.