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Recent trading in the tech world is giving investors pause about more picks in the sector, forcing many to refocus on only the most promising names in the field. This strategy looks to leave many companies in the dust, and could put a premium on stocks that are actually growing revenues too.
This is bad news for stocks like Ebix (), as this software supplier to the insurance industry has seen weakness leading into recent trading, and has some sluggish fundamentals too. Such underlying trends may prove to be a rough environment for EBIX investors no matter what is happening in the broad tech sector. Let’s take a closer look at why we are so bearish on this struggling stock right now.
Weak Fundamentals
Ebix currently has a VGM Score of ‘F’, putting it in the very bottom from a fundamental look. The company actually doesn’t receive a component grade—value, growth, momentum—above ‘C’, so the poor fundamentals are pretty widespread for this name.
From a value look, EBIX struggles with its P/CF that is far higher than the industry average, and a PEG ratio that is quickly approaching two. In terms of growth, the company’s EPS track record isn’t exactly inspiring, as it has a historical EPS growth rate of under 2%, and a projected EPS growth rate less than 0.5% for the future too. Add in a ‘D’ Grade for momentum, and it is easy to see why the fundamental picture is so poor for this company right now.
Sluggish Estimate Trend
Though Ebix has a solid history when it comes to beating earnings estimates, the company does not have a great trend when we look to the most recent analyst estimates. We haven’t seen any analysts increase their estimates for Ebix stock in the past two months for either the current year or the current quarter time frames.
The magnitude of these declines has also been troubling, as we see a double-digit percentage decline in the consensus estimate for both the current quarter and the following quarter, over just the past two months. Add in a nearly six percent decline in the consensus estimate for the full year over the past two months, and it shouldn’t be a surprise that EBIX has a Zacks Rank #5 (Strong Sell) right now.
Clearly, there are some concerns over Ebix these days, and it isn’t like the tech sector is concern-free at this point either. That means that investors might want to look to better positioned tech names at this time.
One area that might be worth investigating further is that of the semiconductor market. This area of the tech world has seen tremendous growth as of late and has plenty of good opportunities in the months and years ahead too.
Plus, many industries in this market have top ranks, making them far better choices than companies like Ebix at this time. One impressive example of this trend is Intel ((INTC - Free Report) ), a Zacks Rank #2 (Buy) stock. The company was just upgraded to buy territory and it has a VGM Score of ‘A’ too. So, if you are looking for a better tech option now, definitely consider the chip leader of Intel—and other semiconductor names—over Ebix and its sluggish tech services market, at least until they can turn things around on the growth and earnings estimate fronts.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>
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Bear of the Day: Ebix (EBIX)
Recent trading in the tech world is giving investors pause about more picks in the sector, forcing many to refocus on only the most promising names in the field. This strategy looks to leave many companies in the dust, and could put a premium on stocks that are actually growing revenues too.
This is bad news for stocks like Ebix (), as this software supplier to the insurance industry has seen weakness leading into recent trading, and has some sluggish fundamentals too. Such underlying trends may prove to be a rough environment for EBIX investors no matter what is happening in the broad tech sector. Let’s take a closer look at why we are so bearish on this struggling stock right now.
Weak Fundamentals
Ebix currently has a VGM Score of ‘F’, putting it in the very bottom from a fundamental look. The company actually doesn’t receive a component grade—value, growth, momentum—above ‘C’, so the poor fundamentals are pretty widespread for this name.
From a value look, EBIX struggles with its P/CF that is far higher than the industry average, and a PEG ratio that is quickly approaching two. In terms of growth, the company’s EPS track record isn’t exactly inspiring, as it has a historical EPS growth rate of under 2%, and a projected EPS growth rate less than 0.5% for the future too. Add in a ‘D’ Grade for momentum, and it is easy to see why the fundamental picture is so poor for this company right now.
Sluggish Estimate Trend
Though Ebix has a solid history when it comes to beating earnings estimates, the company does not have a great trend when we look to the most recent analyst estimates. We haven’t seen any analysts increase their estimates for Ebix stock in the past two months for either the current year or the current quarter time frames.
The magnitude of these declines has also been troubling, as we see a double-digit percentage decline in the consensus estimate for both the current quarter and the following quarter, over just the past two months. Add in a nearly six percent decline in the consensus estimate for the full year over the past two months, and it shouldn’t be a surprise that EBIX has a Zacks Rank #5 (Strong Sell) right now.
Ebix, Inc. Price and Consensus
Ebix, Inc. Price and Consensus | Ebix, Inc. Quote
Other Choices
Clearly, there are some concerns over Ebix these days, and it isn’t like the tech sector is concern-free at this point either. That means that investors might want to look to better positioned tech names at this time.
One area that might be worth investigating further is that of the semiconductor market. This area of the tech world has seen tremendous growth as of late and has plenty of good opportunities in the months and years ahead too.
Plus, many industries in this market have top ranks, making them far better choices than companies like Ebix at this time. One impressive example of this trend is Intel ((INTC - Free Report) ), a Zacks Rank #2 (Buy) stock. The company was just upgraded to buy territory and it has a VGM Score of ‘A’ too. So, if you are looking for a better tech option now, definitely consider the chip leader of Intel—and other semiconductor names—over Ebix and its sluggish tech services market, at least until they can turn things around on the growth and earnings estimate fronts.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>