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Comtech Telecommunications (CMTL) Gains But Lags Market: What You Should Know

Zacks Equity Research

In the latest trading session, Comtech Telecommunications (CMTL) closed at $27.61, marking a +0.44% move from the previous day. The stock lagged the S&P 500's daily gain of 1.21%. Meanwhile, the Dow gained 0.97%, and the Nasdaq, a tech-heavy index, added 1.35%.

Coming into today, shares of the communications company had gained 0.62% in the past month. In that same time, the Computer and Technology sector lost 3.41%, while the S&P 500 lost 3.6%.

Wall Street will be looking for positivity from CMTL as it approaches its next earnings report date. In that report, analysts expect CMTL to post earnings of $0.10 per share. This would mark a year-over-year decline of 75%. Meanwhile, our latest consensus estimate is calling for revenue of $164.70 million, down 1.64% from the prior-year quarter.

Investors should also note any recent changes to analyst estimates for CMTL. 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. 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.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. CMTL is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, CMTL is holding a Forward P/E ratio of 21.48. For comparison, its industry has an average Forward P/E of 21.23, which means CMTL is trading at a premium to the group.

It is also worth noting that CMTL currently has a PEG ratio of 4.3. 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. CMTL's industry had an average PEG ratio of 2.83 as of yesterday's close.

The Wireless Equipment industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 102, putting it in the top 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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