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Commercial Metals (CMC) closed at $20.18 in the latest trading session, marking a +1.25% move from the prior day. This change outpaced the S&P 500's 0.19% loss on the day. Meanwhile, the Dow lost 0.49%, and the Nasdaq, a tech-heavy index, added 0.45%.
Heading into today, shares of the manufacturer and recycler of steel and metal products had gained 2.47% over the past month, lagging the Basic Materials sector's gain of 16.29% and the S&P 500's gain of 7.68% in that time.
Investors will be hoping for strength from CMC as it approaches its next earnings release. In that report, analysts expect CMC to post earnings of $0.54 per share. This would mark a year-over-year decline of 26.03%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.36 billion, down 1.81% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $1.81 per share and revenue of $5.38 billion, which would represent changes of -31.44% and -1.77%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for CMC. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 4.36% lower. CMC is currently sporting a Zacks Rank of #4 (Sell).
Valuation is also important, so investors should note that CMC has a Forward P/E ratio of 11.01 right now. For comparison, its industry has an average Forward P/E of 18.98, which means CMC is trading at a discount to the group.
Also, we should mention that CMC has a PEG ratio of 3.23. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Steel - Producers industry currently had an average PEG ratio of 1.93 as of yesterday's close.
The Steel - Producers industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Rank of 126, which puts it in the top 50% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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