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

Zacks Equity Research

Magnachip (MX) closed at $11.51 in the latest trading session, marking a -0.26% move from the prior day. This move lagged the S&P 500's daily gain of 1.39%. Meanwhile, the Dow gained 1.11%, and the Nasdaq, a tech-heavy index, added 1.65%.

Coming into today, shares of the chip products maker had gained 18.85% in the past month. In that same time, the Computer and Technology sector gained 21.08%, while the S&P 500 gained 25.31%.

Wall Street will be looking for positivity from MX as it approaches its next earnings report date. This is expected to be May 6, 2020. On that day, MX is projected to report earnings of $0.15 per share, which would represent year-over-year growth of 125.86%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $192 million, up 22% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.89 per share and revenue of $811 million, which would represent changes of +85.42% and +2.37%, respectively, from the prior year.

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It is also important to note the recent changes to analyst estimates for MX. 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 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.

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 remained stagnant. MX currently has a Zacks Rank of #1 (Strong Buy).

In terms of valuation, MX is currently trading at a Forward P/E ratio of 12.97. Its industry sports an average Forward P/E of 26.58, so we one might conclude that MX is trading at a discount comparatively.

The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 156, which puts it in the bottom 39% 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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