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Capital One (COF) Outpaces Stock Market Gains: What You Should Know

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Capital One (COF - Free Report) closed at $159.84 in the latest trading session, marking a +1.02% move from the prior day. This move outpaced the S&P 500's daily gain of 0.19%.

Heading into today, shares of the credit card issuer and bank had gained 13.87% over the past month, outpacing the Finance sector's gain of 3.6% and the S&P 500's gain of 0.37% in that time.

Investors will be hoping for strength from COF as it approaches its next earnings release. In that report, analysts expect COF to post earnings of $4.42 per share. This would mark year-over-year growth of 374.53%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7 billion, up 6.76% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $17.83 per share and revenue of $28.77 billion, which would represent changes of +243.55% and +0.85%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for COF. 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 has moved 36.42% higher. COF is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, COF is currently trading at a Forward P/E ratio of 8.88. This valuation marks a premium compared to its industry's average Forward P/E of 8.82.

Investors should also note that COF has a PEG ratio of 0.93 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. The Financial - Consumer Loans industry currently had an average PEG ratio of 0.53 as of yesterday's close.

The Financial - Consumer Loans industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 19, which puts it in the top 8% 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.

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