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Simply Good Foods (SMPL) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Simply Good Foods (SMPL) closed the most recent trading day at $29.72, moving -1.33% from the previous trading session. This change lagged the S&P 500's 0.31% loss on the day. Meanwhile, the Dow lost 0.52%, and the Nasdaq, a tech-heavy index, lost 0.28%.

Coming into today, shares of the nutritional foods company had gained 13.36% in the past month. In that same time, the Consumer Staples sector gained 1.67%, while the S&P 500 gained 2.92%.

Investors will be hoping for strength from SMPL as it approaches its next earnings release. The company is expected to report EPS of $0.16, up 3.33% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $130.57 million, up 20.61% from the year-ago period.

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

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. SMPL currently has a Zacks Rank of #4 (Sell).

Investors should also note SMPL's current valuation metrics, including its Forward P/E ratio of 41.15. Its industry sports an average Forward P/E of 25.9, so we one might conclude that SMPL is trading at a premium comparatively.

The Food - Confectionery industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 37, putting it in the top 15% 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.

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

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