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Griffon (GFF) Laps the Stock Market: Here's Why

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Griffon (GFF - Free Report) closed at $42.69 in the latest trading session, marking a +1.11% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.28%. At the same time, the Dow added 0.17%, and the tech-heavy Nasdaq gained 0.9%.

Prior to today's trading, shares of the garage door and building products maker had gained 5.5% over the past month. This has outpaced the Conglomerates sector's loss of 2.6% and the S&P 500's gain of 1.45% in that time.

The investment community will be closely monitoring the performance of Griffon in its forthcoming earnings report. It is anticipated that the company will report an EPS of $0.97, marking a 11.01% fall compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $653.53 million, indicating a 7.82% decrease compared to the same quarter of the previous year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Griffon. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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 varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.61% higher. Right now, Griffon possesses a Zacks Rank of #3 (Hold).

In the context of valuation, Griffon is at present trading with a Forward P/E ratio of 10.32. This expresses a discount compared to the average Forward P/E of 15.83 of its industry.

Meanwhile, GFF's PEG ratio is currently 1.28. 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 average PEG ratio for the Diversified Operations industry stood at 1.95 at the close of the market yesterday.

The Diversified Operations industry is part of the Conglomerates sector. This group has a Zacks Industry Rank of 170, putting it in the bottom 33% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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