Here's Why Accel Entertainment (ACEL) is a Great Momentum Stock to Buy

Accel Entertainment (ACEL) is identified as a strong momentum stock, earning a Zacks Momentum Style Score of 'B' and a Zacks Rank of '#2 (Buy)'. The company has shown significant price appreciation, with shares up 21.22% over the past quarter and 20.3% over the last year, outperforming both its industry and the S&P 500. This positive trend is further supported by recent upward revisions to full-year and next fiscal year earnings estimates, suggesting potential for continued near-term outperformance based on Zacks' methodology.

Analysis

Accel Entertainment (ACEL) exhibits strong momentum characteristics, supported by both technical price action and positive fundamental signals, according to the Zacks rating system. The stock has demonstrated significant outperformance, with a 21.22% gain over the past quarter and a 20.3% gain over the last year, surpassing the S&P 500's returns of 16.04% and 19.71% over the same periods, respectively. This performance is also superior to its peer group, with a 7.69% monthly price increase compared to the Zacks Gaming industry's 1.27%. This upward price trend is underpinned by favorable analyst sentiment, as evidenced by upward earnings estimate revisions. For the full fiscal year, the consensus estimate has increased from $0.85 to $0.86 in the last 60 days, with one analyst revising higher and none revising lower. A similar positive revision trend is noted for the next fiscal year. These factors culminate in a Zacks Rank of #2 (Buy) and a Momentum Style Score of 'B', a combination that, based on Zacks' historical research, suggests a higher probability of market outperformance in the near term.

Key Decisions for Investors

• Investors with a momentum-focused strategy should consider ACEL, as its strong price performance and positive earnings revisions align with the criteria for a near-term bullish outlook.
• Monitor future analyst earnings estimate revisions closely, as their continued upward trend is a key fundamental driver supporting the current momentum thesis.
• Given the stock's significant outperformance relative to its industry and the S&P 500, it could be considered a relative strength play, but positions should still be managed with an awareness of broader market and sector-specific risks.
• Recognize that the buy recommendation is heavily predicated on the proprietary Zacks Rank system; therefore, complementing this signal with independent due diligence on the company's core business operations and competitive landscape is prudent.