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Comtech Telecommunications (CMTL) Gains But Lags Market: What You Should Know

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Comtech Telecommunications (CMTL - Free Report) closed at $29.34 in the latest trading session, marking a +0.62% move from the prior day. The stock lagged the S&P 500's daily gain of 1.86%. At the same time, the Dow added 1.63%, and the tech-heavy Nasdaq gained 2.95%.

Prior to today's trading, shares of the communications company had lost 20.11% over the past month. This has lagged the Computer and Technology sector's loss of 11.34% and the S&P 500's loss of 8.85% in that time.

CMTL will be looking to display strength as it nears its next earnings release, which is expected to be December 5, 2018. The company is expected to report EPS of -$0.05, up 28.57% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $127.40 million, up 4.8% from the year-ago period.

CMTL's full-year Zacks Consensus Estimates are calling for earnings of $0.96 per share and revenue of $606.93 million. These results would represent year-over-year changes of +28% and +6.37%, respectively.

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

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. Over the past month, the Zacks Consensus EPS estimate has moved 27.31% higher. CMTL is holding a Zacks Rank of #1 (Strong Buy) right now.

Digging into valuation, CMTL currently has a Forward P/E ratio of 30.27. Its industry sports an average Forward P/E of 20.69, so we one might conclude that CMTL is trading at a premium comparatively.

We can also see that CMTL currently has a PEG ratio of 6.05. 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. The Wireless Equipment was holding an average PEG ratio of 2.07 at yesterday's closing price.

The Wireless Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 30, which puts it in the top 12% of all 250+ industries.

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

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