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SQM (SQM) Gains But Lags Market: What You Should Know

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SQM (SQM - Free Report) closed at $95.29 in the latest trading session, marking a +0.24% move from the prior day. This move lagged the S&P 500's daily gain of 1.29%. Meanwhile, the Dow gained 0.78%, and the Nasdaq, a tech-heavy index, lost 4.94%.

Prior to today's trading, shares of the chemicals company had gained 16.05% over the past month. This has outpaced the Basic Materials sector's gain of 3.27% and the S&P 500's gain of 5.64% in that time.

Wall Street will be looking for positivity from SQM as it approaches its next earnings report date. On that day, SQM is projected to report earnings of $3.80 per share, which would represent year-over-year growth of 236.28%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.17 billion, up 192.8% from the year-ago period.

Any recent changes to analyst estimates for SQM should also be noted by investors. These revisions help to show the ever-changing nature of 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. Within the past 30 days, our consensus EPS projection has moved 5.7% lower. SQM is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, SQM currently has a Forward P/E ratio of 6.39. Its industry sports an average Forward P/E of 6.45, so we one might conclude that SQM is trading at a discount comparatively.

We can also see that SQM currently has a PEG ratio of 0.44. 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 Fertilizers was holding an average PEG ratio of 0.89 at yesterday's closing price.

The Fertilizers industry is part of the Basic Materials sector. This group has a Zacks Industry Rank of 233, putting it in the bottom 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.

To follow SQM in the coming trading sessions, be sure to utilize Zacks.com.


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