Shares of Alto Ingredients (ALTO) have been strong performers lately, with the stock up 8.1% over the past month. The stock hit a new 52-week high of $6.11 in the previous session. Alto Ingredients has gained 107.6% since the start of the year compared to the -8.8% gain for the Zacks Consumer Discretionary sector and the 7.1% return for the Zacks Consumer Products - Discretionary industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on May 6, 2026, Alto Ingredients reported EPS of $0.05 versus consensus estimate of -$0.08 while it missed the consensus revenue estimate by 2.07%.
For the current fiscal year, Alto Ingredients is expected to post earnings of $0.54 per share on $996.46 in revenues. This represents a 671.43% change in EPS on a 8.56% change in revenues. For the next fiscal year, the company is expected to earn $0.83 per share on $1.03 in revenues. This represents a year-over-year change of 53.7% and 3.1%, respectively.
Valuation Metrics
Alto Ingredients 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. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Alto Ingredients has a Value Score of B. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 11.1X current fiscal year EPS estimates, which is not in-line with the peer industry average of 16.2X. On a trailing cash flow basis, the stock currently trades at 13.7X versus its peer group's average of 8.6X. 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 is even more important than the company's VGM Score. Fortunately, Alto Ingredients currently has a Zacks Rank of #1 (Strong Buy) thanks to a solid earnings estimate revision trend.
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 Alto Ingredients fits the bill. Thus, it seems as though Alto Ingredients shares could still be poised for more gains ahead.
How Does ALTO Stack Up to the Competition?
Shares of ALTO 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 Central Garden & Pet Company (CENTA). CENTA has a Zacks Rank of #1 (Strong Buy) and a Value Score of A, a Growth Score of D, and a Momentum Score of D.
Earnings were strong last quarter. Central Garden & Pet Company beat our consensus estimate by 19.44%, and for the current fiscal year, CENTA is expected to post earnings of $2.89 per share on revenue of $2.95 billion.
Shares of Central Garden & Pet Company have gained 16% over the past month, and currently trade at a forward P/E of 13.41X and a P/CF of 9.28X.
The Consumer Products - Discretionary industry is in the top 33% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ALTO and CENTA, even beyond their own solid fundamental situation.
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Alto Ingredients, Inc. (ALTO): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).