E*TRADE Outperforming Peers: Zacks

May 29, 2018 — 2:20 PM EDT

E*TRADE stock has been on a tear this year, as the New York-based online brokerage and its rivals benefit from increased volatility in the stock market and a Federal Reserve that is in interest raising mode. But not only is E*TRADE Financial Corporation (ETFC) stock having a good run, it is outperforming its rivals, according to new research from Zacks Investment Research. Zacks lumps E*TRADE in the financial investment banking industry, which includes 22 stocks. That group has gained 6.42% collectively in 2018, which is well below the 24% increase in shares of E*TRADE since the start of the year.

"The Zacks Consensus Estimate for ETFC's full-year earnings has moved 11.65% higher within the past quarter. This is a sign of improving analyst sentiment and a positive earnings outlook trend," wrote Zacks in a research report. "According to our latest data, ETFC has moved about 30.64% on a year-to-date basis. Meanwhile, stocks in the Finance group have lost about 1.29% on average. This shows that E*TRADE Financial is outperforming its peers so far this year."

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Shares of E*TRADE were recently trading down 2.4%, or $1.56, to $62.49, slumping along with the broader indexes. The Dow Jones Industrial Average was 1.45% lower, while the NASDAQ was off 0.59%.

Since late April, when E*TRADE weighed in with first quarter earnings, shares have been climbing, and Wall Street has been getting more bullish on E*TRADE's prospects. According to data from The Wall Street Journal, 14 Wall Street analysts currently rate E*TRADE a buy, while two have an overweight rating on the stock and two rate it a hold. From a month ago, the EPS estimate for the current second quarter jumped from $0.84 per share to $0.87 per share, while the EPS estimate for the third quarter increased to $0.85 per share from $0.80 per share during the past month.

For the first quarter, the New York-based online brokerage reported net income of $247 million, or diluted EPS of $0.88, and revenue of $708 million. Wall Street, according to Zacks Investment Research, had expected the brokerage to weigh in with EPS of $0.79 and revenue of $690 million. During the quarter, E*TRADE saw a 3% increase in net new brokerage accounts, adding 59,685, and net new brokerage assets of $5.3 billion. The online brokerage ended the first quarter with $392.8 billion in customer assets. Daily average revenue trades (DARTs) of 309,000 marked a company record, as did derivative DARTs of 98,000. DARTs provide a way to measure the performance of a brokerage because they show investors' willingness to invest in stocks.