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Gerdau (GGB) Gains But Lags Market: What You Should Know

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Gerdau (GGB - Free Report) closed the most recent trading day at $4.79, moving +0.63% from the previous trading session. This change lagged the S&P 500's 0.89% gain on the day. At the same time, the Dow added 1.2%, and the tech-heavy Nasdaq lost 0.68%.

Heading into today, shares of the steel producer had lost 14.08% over the past month, lagging the Basic Materials sector's loss of 6% and the S&P 500's loss of 3.9% in that time.

Wall Street will be looking for positivity from Gerdau as it approaches its next earnings report date. The company is expected to report EPS of $0.27, down 27.03% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $3.69 billion, down 4.55% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.53 per share and revenue of $16.38 billion. These totals would mark changes of -8.93% and +2.62%, respectively, from last year.

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

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

Looking at its valuation, Gerdau is holding a Forward P/E ratio of 5.32. Its industry sports an average Forward P/E of 8.78, so we one might conclude that Gerdau is trading at a discount comparatively.

The Steel - Producers industry is part of the Basic Materials sector. This group has a Zacks Industry Rank of 15, putting it in the top 6% 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.

You can find more information on all of these metrics, and much more, on

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