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Exfo (EXFO) Outpaces Stock Market Gains: What You Should Know

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Exfo (EXFO - Free Report) closed at $3.76 in the latest trading session, marking a +0.53% move from the prior day. This move outpaced the S&P 500's daily gain of 0.41%. Elsewhere, the Dow gained 0.39%, while the tech-heavy Nasdaq added 0.57%.

Heading into today, shares of the telecommunications testing company had lost 13.83% over the past month, lagging the Computer and Technology sector's loss of 2.4% and the S&P 500's gain of 0.1% in that time.

EXFO will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.05, up 600% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $74.40 million, up 3.02% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.21 per share and revenue of $293.80 million. These totals would mark changes of +133.33% and +9%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for EXFO. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. The Zacks Consensus EPS estimate remained stagnant within the past month. EXFO is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that EXFO has a Forward P/E ratio of 18.24 right now. This represents a discount compared to its industry's average Forward P/E of 26.07.

The Communication - Components industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 151, which puts it in the bottom 42% 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.

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


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