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Cypress Semiconductor (CY) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
Is (HRS) Outperforming Other Computer and Technology Stocks This Year?

Cypress Semiconductor (CY) closed the most recent trading day at $15.71, moving +0.67% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.13%. Meanwhile, the Dow gained 0.61%, and the Nasdaq, a tech-heavy index, lost 0.08%.

Coming into today, shares of the chipmaker had lost 6.13% in the past month. In that same time, the Computer and Technology sector gained 1.4%, while the S&P 500 gained 2.1%.

CY will be looking to display strength as it nears its next earnings release, which is expected to be October 25, 2018. The company is expected to report EPS of $0.38, up 40.74% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $669.62 million, up 10.76% from the year-ago period.

CY's full-year Zacks Consensus Estimates are calling for earnings of $1.34 per share and revenue of $2.53 billion. These results would represent year-over-year changes of +50.56% and +8.5%, respectively.

Investors might also notice recent changes to analyst estimates for CY. These recent revisions tend to reflect the evolving nature of short-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 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. The Zacks Consensus EPS estimate remained stagnant within the past month. CY is currently a Zacks Rank #1 (Strong Buy).

Valuation is also important, so investors should note that CY has a Forward P/E ratio of 11.67 right now. For comparison, its industry has an average Forward P/E of 14.88, which means CY is trading at a discount to the group.

It is also worth noting that CY currently has a PEG ratio of 0.72. 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 Semiconductor - Communications was holding an average PEG ratio of 1.53 at yesterday's closing price.

The Semiconductor - Communications industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 15, which puts it in the top 6% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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