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Intellinetics, Inc. (INLX) Soars to 52-Week High, Time to Cash Out?

Have you been paying attention to shares of Intellinetics (INLX)? Shares have been on the move with the stock up 62% over the past month. The stock hit a new 52-week high of $9.9 in the previous session. Intellinetics has gained 85.8% since the start of the year compared to the 26.4% move for the Zacks Computer and Technology sector and the -6.7% return for the Zacks Internet - Content 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 November 15, 2021, Intellinetics, Inc. reported EPS of $0.1 versus consensus estimate of $0.01 while it beat the consensus revenue estimate by 13.86%.

For the current fiscal year, Intellinetics, Inc. is expected to post earnings of $0.45 per share on $11.61 million in revenues. This represents a 475% change in EPS on a 40.62% change in revenues. For the next fiscal year, the company is expected to earn $0.27 per share on $13.24 million in revenues. This represents a year-over-year change of -40% and 13.99%, respectively.

Valuation Metrics

Intellinetics, Inc. 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 is due for a pullback from this level.

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.

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

In terms of its value breakdown, the stock currently trades at 19.4X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 38.3X versus its peer group's average of 29.7X. 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, Intellinetics, Inc. 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 Intellinetics, Inc. fits the bill. Thus, it seems as though Intellinetics, Inc. shares could have potential in the weeks and months to come.

How Does Intellinetics, Inc. Stack Up to the Competition?

Shares of Intellinetics, Inc. have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also looking good, including Spark Networks (LOV), Perion Network (PERI), and Yelp (YELP), all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.

However, it is worth noting that the Zacks Industry Rank for this group is in the bottom half of the ranking, so it isn't all good news for Intellinetics, Inc. Still, the fundamentals for Intellinetics, Inc. are promising, and it still has potential despite being at a 52-week high.

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