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Callon Petroleum (CPE) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Callon Petroleum (CPE) closed at $2.86 in the latest trading session, marking a +1.78% move from the prior day. This change outpaced the S&P 500's 0.17% gain on the day. Meanwhile, the Dow 0%, and the Nasdaq, a tech-heavy index, added 0.11%.

Coming into today, shares of the independent oil and gas company had lost 31.63% in the past month. In that same time, the Oils-Energy sector lost 10.05%, while the S&P 500 gained 2.78%.

CPE will be looking to display strength as it nears its next earnings release, which is expected to be February 26, 2020. The company is expected to report EPS of $0.13, down 23.53% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $177.53 million, up 9.65% from the year-ago period.

Investors might also notice recent changes to analyst estimates for CPE. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 6.67% lower. CPE is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note CPE's current valuation metrics, including its Forward P/E ratio of 2.54. For comparison, its industry has an average Forward P/E of 8.84, which means CPE is trading at a discount to the group.

Meanwhile, CPE's PEG ratio is currently 0.14. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Oil and Gas - Exploration and Production - United States industry currently had an average PEG ratio of 0.67 as of yesterday's close.

The Oil and Gas - Exploration and Production - United States industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 155, putting it in the bottom 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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