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Gerdau (GGB) Outpaces Stock Market Gains: What You Should Know

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Gerdau (GGB - Free Report) closed the most recent trading day at $4.69, moving +1.52% from the previous trading session. This change outpaced the S&P 500's 1.42% gain on the day. Meanwhile, the Dow gained 0.1%, and the Nasdaq, a tech-heavy index, added 3.69%.

Prior to today's trading, shares of the steel producer had gained 3.13% over the past month. This has outpaced the Basic Materials sector's gain of 2.56% and the S&P 500's loss of 2.26% in that time.

Wall Street will be looking for positivity from GGB as it approaches its next earnings report date. Our most recent consensus estimate is calling for quarterly revenue of $2.43 billion, up 5.07% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.31 per share and revenue of $7.96 billion, which would represent changes of +72.22% and -6.3%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for GGB. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, 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. Within the past 30 days, our consensus EPS projection has moved 35.53% higher. GGB is currently a Zacks Rank #2 (Buy).

In terms of valuation, GGB is currently trading at a Forward P/E ratio of 8.97. For comparison, its industry has an average Forward P/E of 10.56, which means GGB is trading at a discount to the group.

Meanwhile, GGB's PEG ratio is currently 0.61. 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. The Steel - Producers was holding an average PEG ratio of 1.07 at yesterday's closing price.

The Steel - Producers industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Rank of 40, which puts it in the top 16% 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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