Powell Industries (POWL) Stock Drops Despite Market Gains: Important Facts to Note

In the latest trading session, Powell Industries (POWL) closed at $211.91, marking a -2.08% move from the previous day. The stock fell short of the S&P 500, which registered a gain of 0.61% for the day. Meanwhile, the Dow experienced a rise of 0.49%, and the technology-dominated Nasdaq saw an increase of 0.95%.

Heading into today, shares of the energy equipment company had gained 16.5% over the past month, outpacing the Industrial Products sector's gain of 5.35% and the S&P 500's gain of 3.85%.

Investors will be eagerly watching for the performance of Powell Industries in its upcoming earnings disclosure. The company is forecasted to report an EPS of $3.73, showcasing a 1.58% downward movement from the corresponding quarter of the prior year. Simultaneously, our latest consensus estimate expects the revenue to be $295.12 million, showing a 2.41% escalation compared to the year-ago quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $14.17 per share and revenue of $1.11 billion. These totals would mark changes of +15.3% and +9.82%, respectively, from last year.

Investors should also take note of any recent adjustments to analyst estimates for Powell Industries. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Powell Industries is currently sporting a Zacks Rank of #3 (Hold).

In the context of valuation, Powell Industries is at present trading with a Forward P/E ratio of 15.27. Its industry sports an average Forward P/E of 23.08, so one might conclude that Powell Industries is trading at a discount comparatively.

Meanwhile, POWL's PEG ratio is currently 1.09. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Manufacturing - Electronics was holding an average PEG ratio of 1.91 at yesterday's closing price.

The Manufacturing - Electronics industry is part of the Industrial Products sector. Currently, this industry holds a Zacks Industry Rank of 54, positioning it in the top 22% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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