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CommScope (COMM) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
Sonoco (SON) delivered earnings and revenue surprises of -2.06% and -4.16%, respectively, for the quarter ended June 2019. Do the numbers hold clues to what lies ahead for the stock?

CommScope (COMM) closed at $23.87 in the latest trading session, marking a -1.32% move from the prior day. This move lagged the S&P 500's daily loss of 0.21%. Meanwhile, the Dow lost 0.46%, and the Nasdaq, a tech-heavy index, lost 0.16%.

Prior to today's trading, shares of the wireless and broadband network technology company had gained 1.34% over the past month. This has lagged the Computer and Technology sector's gain of 3.11% and the S&P 500's gain of 2.07% in that time.

Investors will be hoping for strength from COMM as it approaches its next earnings release, which is expected to be May 9, 2019. In that report, analysts expect COMM to post earnings of $0.44 per share. This would mark a year-over-year decline of 10.2%. Meanwhile, our latest consensus estimate is calling for revenue of $1.08 billion, down 3.47% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.83 per share and revenue of $9.66 billion. These totals would mark changes of +24.67% and +111.54%, respectively, from last year.

Any recent changes to analyst estimates for COMM should also be noted by investors. 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Within the past 30 days, our consensus EPS projection has moved 24.09% higher. COMM is currently sporting a Zacks Rank of #1 (Strong Buy).

Looking at its valuation, COMM is holding a Forward P/E ratio of 8.54. This valuation marks a discount compared to its industry's average Forward P/E of 43.43.

Investors should also note that COMM has a PEG ratio of 2.14 right now. 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. COMM's industry had an average PEG ratio of 8.12 as of yesterday's close.

The Communication - Infrastructure industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 2, putting it in the top 1% 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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CommScope Holding Company, Inc. (COMM) : Free Stock Analysis Report
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