Signet (SIG) Stock Dips While Market Gains: Key Facts

Brilliant Earth Group, Inc. (BRLT) came out with quarterly earnings of $0.02 per share, beating the Zacks Consensus Estimate of $0.01 per share. This compares to earnings of $0.05 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 100%. A quarter ago, it was expected that this company would post earnings of $0.01 per share when it actually produced earnings of $0.03, delivering a surprise of 200%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Brilliant Earth Group, which belongs to the Zacks Retail - Jewelry industry, posted revenues of $99.87 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 0.52%. This compares to year-ago revenues of $114.15 million. The company has not been able to beat consensus revenue estimates over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Brilliant Earth Group shares have lost about 54% since the beginning of the year versus the S&P 500's gain of 24.3%.

What's Next for Brilliant Earth Group?

While Brilliant Earth Group has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Brilliant Earth Group: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is breakeven on $116.64 million in revenues for the coming quarter and $0.05 on $419.59 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Retail - Jewelry is currently in the bottom 18% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Signet (SIG), another stock in the same industry, has yet to report results for the quarter ended October 2024.

This jewelry company is expected to post quarterly earnings of $0.29 per share in its upcoming report, which represents a year-over-year change of +20.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Signet's revenues are expected to be $1.36 billion, down 2% from the year-ago quarter.

Zacks Investment Research

Signet (SIG) closed at $98.01 in the latest trading session, marking a +0.73% move from the prior day. The stock fell short of the S&P 500, which registered a gain of 0.74% for the day.

The jewelry company's stock has dropped by 1.3% in the past month, falling short of the Retail-Wholesale sector's gain of 3.49% and the S&P 500's gain of 3.16%.

Analysts and investors alike will be keeping a close eye on the performance of Signet in its upcoming earnings disclosure. The company is predicted to post an EPS of $0.29, indicating a 20.83% growth compared to the equivalent quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $1.36 billion, down 2% from the prior-year quarter.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $10.80 per share and revenue of $6.84 billion, indicating changes of +4.15% and -4.59%, respectively, compared to the previous year.

It is also important to note the recent changes to analyst estimates for Signet. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. 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, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Signet is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Signet has a Forward P/E ratio of 9.01 right now. This valuation marks a discount compared to its industry's average Forward P/E of 20.5.

Investors should also note that SIG has a PEG ratio of 1.1 right now. 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 Retail - Jewelry was holding an average PEG ratio of 2.12 at yesterday's closing price.

The Retail - Jewelry industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 207, which puts it in the bottom 18% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming 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.

Zacks Investment Research

The Pacer US Small Cap Cash Cows 100 ETF (CALF) was launched on 06/16/2017, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Value segment of the US equity market.

The fund is sponsored by Pacer Etfs. It has amassed assets over $8.66 billion, making it one of the larger ETFs attempting to match the Small Cap Value segment of the US equity market.

Why Small Cap Value

Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.

Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.59%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.11%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Consumer Discretionary sector--about 28.50% of the portfolio. Energy and Industrials round out the top three.

Looking at individual holdings, Peabody Energy Corp (BTU) accounts for about 2.28% of total assets, followed by Signet Jewelers Ltd (SIG) and Sylvamo Corp (SLVM).

The top 10 holdings account for about 20.74% of total assets under management.

Performance and Risk

CALF seeks to match the performance of the Pacer US Small Cap Cash Cows Index before fees and expenses. The Pacer US Small Cap Cash Cows Index uses an objective, rules-based methodology to provide exposure to small-capitalization U.S. companies with high free cash flow yields.

The ETF has lost about -7.08% so far this year and it's up approximately 13% in the last one year (as of 11/01/2024). In the past 52-week period, it has traded between $40.41 and $49.16.

The ETF has a beta of 1.18 and standard deviation of 24.40% for the trailing three-year period. With about 102 holdings, it effectively diversifies company-specific risk.

Alternatives

Pacer US Small Cap Cash Cows 100 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, CALF is a sufficient option for those seeking exposure to the Style Box - Small Cap Value area of the market. Investors might also want to consider some other ETF options in the space.

The Avantis U.S. Small Cap Value ETF (AVUV) and the Vanguard Small-Cap Value ETF (VBR) track a similar index. While Avantis U.S. Small Cap Value ETF has $13.94 billion in assets, Vanguard Small-Cap Value ETF has $30.59 billion. AVUV has an expense ratio of 0.25% and VBR charges 0.07%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

Zacks Investment Research

Signet (SIG) closed the most recent trading day at $91.68, moving -0.93% from the previous trading session. This change was narrower than the S&P 500's daily loss of 1.86%. Elsewhere, the Dow lost 0.9%, while the tech-heavy Nasdaq lost 2.76%.

The jewelry company's stock has dropped by 2.26% in the past month, falling short of the Retail-Wholesale sector's loss of 0.23% and the S&P 500's gain of 1.01%.

Analysts and investors alike will be keeping a close eye on the performance of Signet in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $0.29, reflecting a 20.83% increase from the same quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $1.36 billion, indicating a 2% decrease compared to the same quarter of the previous year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $10.80 per share and a revenue of $6.84 billion, indicating changes of +4.15% and -4.59%, respectively, from the former year.

Any recent changes to analyst estimates for Signet should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Signet currently has a Zacks Rank of #3 (Hold).

Looking at valuation, Signet is presently trading at a Forward P/E ratio of 8.57. For comparison, its industry has an average Forward P/E of 20.38, which means Signet is trading at a discount to the group.

Also, we should mention that SIG has a PEG ratio of 1.05. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Retail - Jewelry industry stood at 2.12 at the close of the market yesterday.

The Retail - Jewelry industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 204, finds itself in the bottom 20% echelons of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

Zacks Investment Research