Have you been paying attention to shares of Signet Jewelers (SIG)? Shares have been on the move with the stock up 15.6% over the past month. The stock hit a new 52-week high of $74.8 in the previous session. Signet Jewelers has gained 155.2% since the start of the year compared to the -1.4% move for the Zacks Retail-Wholesale sector and the 139.6% return for the Zacks Retail - Jewelry 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 June 10, 2021, Signet reported EPS of $2.23 versus consensus estimate of $1.41 while it beat the consensus revenue estimate by 5.27%.

Valuation Metrics

Signet 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.

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

In terms of its value breakdown, the stock currently trades at 14.5X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 11.6X versus its peer group's average of 11.6X. 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, Signet currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.

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 Signet fits the bill. Thus, it seems as though Signet shares could still be poised for more gains ahead.

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