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Ubiquiti Networks (UBNT) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
Amazon (AMZN) closed the most recent trading day at $2,020.99, moving +0.5% from the previous trading session.

Ubiquiti Networks (UBNT) closed at $107.94 in the latest trading session, marking a +1.61% move from the prior day. The stock outpaced the S&P 500's daily gain of 1.56%. Meanwhile, the Dow gained 1.77%, and the Nasdaq, a tech-heavy index, added 2.2%.

Prior to today's trading, shares of the computer networking company had gained 6.86% over the past month. This has outpaced the Computer and Technology sector's gain of 4.45% and the S&P 500's gain of 6.41% in that time.

Wall Street will be looking for positivity from UBNT as it approaches its next earnings report date. This is expected to be February 14, 2019. On that day, UBNT is projected to report earnings of $0.94 per share, which would represent year-over-year growth of 23.68%. Meanwhile, our latest consensus estimate is calling for revenue of $253.40 million, up 1.03% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.12 per share and revenue of $1.06 billion, which would represent changes of +11.65% and +4.57%, respectively, from the prior year.

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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. UBNT is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that UBNT has a Forward P/E ratio of 25.82 right now. This represents a premium compared to its industry's average Forward P/E of 19.75.

Also, we should mention that UBNT has a PEG ratio of 1.84. 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. Wireless Equipment stocks are, on average, holding a PEG ratio of 1.73 based on yesterday's closing prices.

The Wireless Equipment industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 79, putting it in the top 31% 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.

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

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