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Magnachip (MX) Flat As Market Gains: What You Should Know

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In the latest trading session, Magnachip (MX - Free Report) closed at $10.30, marking no change from the previous day. This move lagged the S&P 500's daily gain of 0.5%. At the same time, the Dow lost 0.3%, and the tech-heavy Nasdaq gained 0.95%.

Heading into today, shares of the chip products maker had lost 7.95% over the past month, lagging the Computer and Technology sector's gain of 5.8% and the S&P 500's gain of 1.89% in that time.

MX will be looking to display strength as it nears its next earnings release. On that day, MX is projected to report earnings of $0.08 per share, which would represent no growth from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $117.70 million, down 42.63% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.18 per share and revenue of $480 million, which would represent changes of -62.5% and -39.41%, respectively, from the prior year.

Any recent changes to analyst estimates for MX should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. Within the past 30 days, our consensus EPS projection remained stagnant. MX is currently a Zacks Rank #4 (Sell).

In terms of valuation, MX is currently trading at a Forward P/E ratio of 57.22. This valuation marks a premium compared to its industry's average Forward P/E of 38.56.

The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 86, putting it in the top 34% 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.

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


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