Back to top

Image: Bigstock

Big Lots (BIG) Gains But Lags Market: What You Should Know

Read MoreHide Full Article

In the latest trading session, Big Lots (BIG - Free Report) closed at $51.68, marking a +1.12% move from the previous day. This change lagged the S&P 500's 1.62% gain on the day. At the same time, the Dow added 1.54%, and the tech-heavy Nasdaq gained 1.31%.

Prior to today's trading, shares of the discount retailer had gained 1.69% over the past month. This has outpaced the Retail-Wholesale sector's gain of 0.03% and lagged the S&P 500's gain of 3.4% in that time.

Wall Street will be looking for positivity from BIG as it approaches its next earnings report date. This is expected to be December 4, 2020. The company is expected to report EPS of $0.65, up 461.11% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.35 billion, up 15.65% from the prior-year quarter.

BIG's full-year Zacks Consensus Estimates are calling for earnings of $7.73 per share and revenue of $6.16 billion. These results would represent year-over-year changes of +110.63% and +15.75%, respectively.

Investors should also note any recent changes to analyst estimates for BIG. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. BIG currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, BIG is holding a Forward P/E ratio of 6.62. For comparison, its industry has an average Forward P/E of 20.78, which means BIG is trading at a discount to the group.

Investors should also note that BIG has a PEG ratio of 1.46 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Discount Stores was holding an average PEG ratio of 2.41 at yesterday's closing price.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 110, putting it in the top 44% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Big Lots, Inc. (BIG) - free report >>

Published in