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Ubiquiti Networks (UBNT) Gains But Lags Market: What You Should Know

Zacks Equity Research

In the latest trading session, Ubiquiti Networks (UBNT) closed at $129.97, marking a +0.04% move from the previous day. This move lagged the S&P 500's daily gain of 0.46%. Elsewhere, the Dow gained 0.9%, while the tech-heavy Nasdaq added 0.59%.

Prior to today's trading, shares of the computer networking company had lost 1.59% over the past month. This has lagged the Computer and Technology sector's gain of 5.19% and the S&P 500's gain of 4.04% in that time.

Wall Street will be looking for positivity from UBNT as it approaches its next earnings report date. The company is expected to report EPS of $1.13, up 11.88% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $280.29 million, up 3.9% from the year-ago period.

Any recent changes to analyst estimates for UBNT should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 remained stagnant within the past month. UBNT currently has a Zacks Rank of #1 (Strong Buy).

Looking at its valuation, UBNT is holding a Forward P/E ratio of 26.62. This represents a premium compared to its industry's average Forward P/E of 24.76.

Also, we should mention that UBNT has a PEG ratio of 1.34. 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. UBNT's industry had an average PEG ratio of 2.97 as of yesterday's close.

The Wireless Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 24, which puts it in the top 10% 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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