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

Zacks Equity Research

Zumiez (ZUMZ) closed the most recent trading day at $31.77, moving -0.5% from the previous trading session. This change lagged the S&P 500's daily gain of 0.37%. Meanwhile, the Dow gained 0.42%, and the Nasdaq, a tech-heavy index, added 0.56%.

Coming into today, shares of the clothing retailer had gained 2.24% in the past month. In that same time, the Retail-Wholesale sector gained 2.79%, while the S&P 500 gained 4.42%.

Investors will be hoping for strength from ZUMZ as it approaches its next earnings release. In that report, analysts expect ZUMZ to post earnings of $0.59 per share. This would mark year-over-year growth of 7.27%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $260.37 million, up 4.65% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.16 per share and revenue of $1.02 billion, which would represent changes of +20.67% and +4.45%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for ZUMZ. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ZUMZ is currently a Zacks Rank #1 (Strong Buy).

Valuation is also important, so investors should note that ZUMZ has a Forward P/E ratio of 14.81 right now. This represents a premium compared to its industry's average Forward P/E of 12.75.

Investors should also note that ZUMZ has a PEG ratio of 1.23 right now. 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. Retail - Apparel and Shoes stocks are, on average, holding a PEG ratio of 1.37 based on yesterday's closing prices.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale 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 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.

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

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