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SQM (SQM) Gains But Lags Market: What You Should Know

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In the latest trading session, SQM (SQM) closed at $98.37, marking a +1.14% move from the previous day. The stock lagged the S&P 500's daily gain of 1.42%. Meanwhile, the Dow gained 0.97%, and the Nasdaq, a tech-heavy index, lost 0.07%.

Coming into today, shares of the chemicals company had gained 16.44% in the past month. In that same time, the Basic Materials sector lost 5.45%, while the S&P 500 gained 6.69%.

Investors will be hoping for strength from SQM as it approaches its next earnings release. The company is expected to report EPS of $3.24, up 945.16% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.2 billion, up 273.91% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $12.58 per share and revenue of $8.65 billion. These totals would mark changes of +513.66% and +202.27%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for SQM. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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.

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. The Zacks Consensus EPS estimate has moved 32.62% higher within the past month. SQM is holding a Zacks Rank of #1 (Strong Buy) right now.

Investors should also note SQM's current valuation metrics, including its Forward P/E ratio of 7.73. Its industry sports an average Forward P/E of 4.88, so we one might conclude that SQM is trading at a premium comparatively.

Investors should also note that SQM has a PEG ratio of 0.44 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Fertilizers was holding an average PEG ratio of 0.58 at yesterday's closing price.

The Fertilizers industry is part of the Basic Materials sector. This group has a Zacks Industry Rank of 35, putting it in the top 14% 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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