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Seagate (STX) Gains But Lags Market: What You Should Know

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Seagate (STX - Free Report) closed at $83.94 in the latest trading session, marking a +0.02% move from the prior day. The stock lagged the S&P 500's daily gain of 0.23%.

Prior to today's trading, shares of the electronic storage maker had lost 7.11% over the past month. This has lagged the Business Services sector's gain of 0.17% and the S&P 500's gain of 0.65% in that time.

STX will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.21, up 137.63% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $3.1 billion, up 34.11% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.26 per share and revenue of $11.82 billion, which would represent changes of +46.45% and +10.69%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for STX. 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. STX is currently a Zacks Rank #3 (Hold).

In terms of valuation, STX is currently trading at a Forward P/E ratio of 10.16. This valuation marks a discount compared to its industry's average Forward P/E of 32.09.

Also, we should mention that STX has a PEG ratio of 8.4. 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. STX's industry had an average PEG ratio of 2.52 as of yesterday's close.

The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 218, putting it in the bottom 15% 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.

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


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