A strong stock as of late has been Lenovo Group Ltd. (LNVGY). Shares have been marching higher, with the stock up 61.8% over the past month. The stock hit a new 52-week high of $49.5 in the previous session. Lenovo Group has gained 104.9% since the start of the year compared to the 19.2% gain for the Zacks Computer and Technology sector and the 17.1% return for the Zacks Computer - Micro Computers 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 May 21, 2026, Lenovo Group reported EPS of $0.82 versus consensus estimate of $0.4.
For the current fiscal year, Lenovo Group is expected to post earnings of $2.69 per share on $93.88 in revenues. This represents a -9.4% change in EPS on a 13.01% change in revenues. For the next fiscal year, the company is expected to earn $3.54 per share on $104.5 in revenues. This represents a year-over-year change of 31.3% and 11.32%, respectively.
Valuation Metrics
Lenovo Group 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. 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.
Lenovo Group has a Value Score of B. 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 18X current fiscal year EPS estimates, which is not in-line with the peer industry average of 23.2X. On a trailing cash flow basis, the stock currently trades at 10.5X versus its peer group's average of 15.9X. Additionally, the stock has a PEG ratio of 1.76. 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, Lenovo Group 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 Lenovo Group meets the list of requirements. Thus, it seems as though Lenovo Group shares could still be poised for more gains ahead.
How Does LNVGY Stack Up to the Competition?
Shares of LNVGY 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 HP Inc. (HPQ). HPQ has a Zacks Rank of #2 (Buy) and a Value Score of A, a Growth Score of C, and a Momentum Score of B.
Earnings were strong last quarter. HP Inc. beat our consensus estimate by 19.44%, and for the current fiscal year, HPQ is expected to post earnings of $2.85 per share on revenue of $57.22 billion.
Shares of HP Inc. have gained 26.6% over the past month, and currently trade at a forward P/E of 8.94X and a P/CF of 6.13X.
The Computer - Micro Computers industry is in the top 12% of all the industries we have in our universe, so it looks like there are some nice tailwinds for LNVGY and HPQ, even beyond their own solid fundamental situation.
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This article originally published on Zacks Investment Research (zacks.com).