Have you been paying attention to shares of Skyward Specialty Insurance (SKWD)? Shares have been on the move with the stock up 10% over the past month. The stock hit a new 52-week high of $50.21 in the previous session. Skyward Specialty Insurance has gained 47.6% since the start of the year compared to the 24.1% move for the Zacks Finance sector and the 30.4% 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, Skyward reported EPS of $0.71 versus consensus estimate of $0.64.

For the current fiscal year, Skyward is expected to post earnings of $3.06 per share on $1.14 billion in revenues. This represents a 45.02% change in EPS on a 28.65% change in revenues. For the next fiscal year, the company is expected to earn $3.37 per share on $1.27 billion in revenues. This represents a year-over-year change of 10.08% and 11.68%, respectively.

Valuation Metrics

Skyward 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 these give investors a variety of ways to comb 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.

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

In terms of its value breakdown, the stock currently trades at 16.3X current fiscal year EPS estimates, which is a premium to the peer industry average of 13.8X. On a trailing cash flow basis, the stock currently trades at 22.2X versus its peer group's average of 13.8X. Additionally, the stock has a PEG ratio of 0.91. 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, Skyward currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.