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Zumiez (ZUMZ) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Zumiez (ZUMZ) closed at $31.10 in the latest trading session, marking a +1.97% move from the prior day. The stock outpaced the S&P 500's daily gain of 1.09%. Meanwhile, the Dow gained 1.21%, and the Nasdaq, a tech-heavy index, added 1.34%.

Heading into today, shares of the clothing retailer had lost 7.04% over the past month, lagging the Retail-Wholesale sector's loss of 3.08% and the S&P 500's loss of 1.17% in that time.

ZUMZ will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.59, up 7.27% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $260.37 million, up 4.65% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.16 per share and revenue of $1.02 billion. These totals would mark changes of +20.67% and +4.45%, respectively, from last year.

Any recent changes to analyst estimates for ZUMZ should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. ZUMZ is currently sporting a Zacks Rank of #1 (Strong Buy).

Valuation is also important, so investors should note that ZUMZ has a Forward P/E ratio of 14.14 right now. This represents a premium compared to its industry's average Forward P/E of 11.75.

It is also worth noting that ZUMZ currently has a PEG ratio of 1.18. 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. ZUMZ's industry had an average PEG ratio of 1.28 as of yesterday's close.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 64, putting it in the top 26% 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.

To follow ZUMZ in the coming trading sessions, be sure to utilize Zacks.com.

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