Commercial Metals (CMC) closed the most recent trading day at $21.53, moving -1.42% from the previous trading session. This change lagged the S&P 500's daily loss of 0.9%. At the same time, the Dow lost 0.58%, and the tech-heavy Nasdaq lost 0.93%.
Coming into today, shares of the manufacturer and recycler of steel and metal products had lost 2.24% in the past month. In that same time, the Basic Materials sector lost 1.44%, while the S&P 500 gained 3.3%.
CMC will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.48, up 65.52% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.39 billion, down 0.78% from the prior-year quarter.
CMC's full-year Zacks Consensus Estimates are calling for earnings of $2.50 per share and revenue of $5.91 billion. These results would represent year-over-year changes of +20.19% and +1.37%, respectively.
It is also important to note the recent changes to analyst estimates for CMC. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 12.68% higher. CMC is currently a Zacks Rank #2 (Buy).
Investors should also note CMC's current valuation metrics, including its Forward P/E ratio of 8.72. This valuation marks a discount compared to its industry's average Forward P/E of 12.02.
Investors should also note that CMC has a PEG ratio of 2.3 right now. 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 Steel - Producers was holding an average PEG ratio of 1.64 at yesterday's closing price.
The Steel - Producers industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Rank of 202, which puts it in the bottom 21% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
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