SS&C Technologies (SSNC) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
Xilinx (XLNX) delivered earnings and revenue surprises of -2.08% and 0.17%, respectively, for the quarter ended March 2019. Do the numbers hold clues to what lies ahead for the stock?

In the latest trading session, SS&C Technologies (SSNC) closed at $62.13, marking a -0.89% move from the previous day. This move lagged the S&P 500's daily loss of 0.29%. Meanwhile, the Dow lost 0.55%, and the Nasdaq, a tech-heavy index, added 0.07%.

Coming into today, shares of the financial services software maker had gained 3.69% in the past month. In that same time, the Computer and Technology sector gained 4.76%, while the S&P 500 gained 2.14%.

Investors will be hoping for strength from SSNC as it approaches its next earnings release. The company is expected to report EPS of $0.88, up 66.04% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.15 billion, up 172.9% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.81 per share and revenue of $4.73 billion. These totals would mark changes of +30.48% and +37.07%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for SSNC. These revisions typically reflect the latest short-term business trends, which can change frequently. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. SSNC currently has a Zacks Rank of #1 (Strong Buy).

Investors should also note SSNC's current valuation metrics, including its Forward P/E ratio of 16.45. Its industry sports an average Forward P/E of 30.21, so we one might conclude that SSNC is trading at a discount comparatively.

Meanwhile, SSNC's PEG ratio is currently 1.37. 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 Computer - Software was holding an average PEG ratio of 2.18 at yesterday's closing price.

The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 23, which puts it in the top 10% 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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