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Seagate (STX) Dips More Than Broader Markets: What You Should Know

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Seagate (STX - Free Report) closed the most recent trading day at $110.96, moving -1.26% from the previous trading session. This move lagged the S&P 500's daily loss of 0.41%. Elsewhere, the Dow lost 0.01%, while the tech-heavy Nasdaq added 0.13%.

Heading into today, shares of the electronic storage maker had gained 9.18% over the past month, outpacing the Business Services sector's loss of 12.79% and the S&P 500's gain of 2.36% in that time.

Investors will be hoping for strength from Seagate as it approaches its next earnings release. In that report, analysts expect Seagate to post earnings of $2.38 per share. This would mark year-over-year growth of 84.5%. Meanwhile, our latest consensus estimate is calling for revenue of $3.11 billion, up 18.43% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.85 per share and revenue of $11.94 billion. These totals would mark changes of +56.91% and +11.83%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Seagate. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Seagate is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, Seagate currently has a Forward P/E ratio of 12.7. This represents a discount compared to its industry's average Forward P/E of 20.98.

It is also worth noting that STX currently has a PEG ratio of 10.5. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Technology Services stocks are, on average, holding a PEG ratio of 1.61 based on yesterday's closing prices.

The Technology Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 192, which puts it in the bottom 25% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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