A strong stock as of late has been LifeStance Health Group (LFST). Shares have been marching higher, with the stock up 9.4% over the past month. The stock hit a new 52-week high of $12.43 in the previous session. LifeStance Health has gained 69% since the start of the year compared to the 3.5% move for the Zacks Medical sector and the 21.8% return for the Zacks Medical - Outpatient and Home Healthcare industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on August 6, 2026, LifeStance Health reported EPS of $0.06 versus consensus estimate of $0.03 while it beat the consensus revenue estimate by 5.08%.
For the current fiscal year, LifeStance Health is expected to post earnings of $0.14 per share on $1.66 in revenues. This represents a 600% change in EPS on a 16.56% change in revenues. For the next fiscal year, the company is expected to earn $0.21 per share on $1.88 in revenues. This represents a year-over-year change of 52.38% and 13.17%, respectively.
Valuation Metrics
Though LifeStance Health has recently hit a 52-week high, what is next for LifeStance Health? 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). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
LifeStance Health has a Value Score of D. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 87.1X current fiscal year EPS estimates, which is a premium to the peer industry average of 21.1X. On a trailing cash flow basis, the stock currently trades at 70.7X versus its peer group's average of 14.9X. 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 look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, LifeStance Health currently has a Zacks Rank of #2 (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 LifeStance Health meets the list of requirements. Thus, it seems as though LifeStance Health shares could have a bit more room to run in the near term.
How Does LFST Stack Up to the Competition?
Shares of LFST 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 Encompass Health Corporation (EHC). EHC has a Zacks Rank of #2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of D.
Earnings were strong last quarter. Encompass Health Corporation beat our consensus estimate by 4.73%, and for the current fiscal year, EHC is expected to post earnings of $6.04 per share on revenue of $6.46 billion.
Shares of Encompass Health Corporation have gained 14.3% over the past month, and currently trade at a forward P/E of 20.82X and a P/CF of 14.15X.
The Medical - Outpatient and Home Healthcare industry is in the top 30% of all the industries we have in our universe, so it looks like there are some nice tailwinds for LFST and EHC, even beyond their own solid fundamental situation.
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LifeStance Health Group, Inc. (LFST): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).