Discover (DFS) Gains As Market Dips: What You Should Know

Discover (DFS) closed at $58.26 in the latest trading session, marking a +1.96% move from the prior day. This change outpaced the S&P 500's 0.34% loss on the day. Meanwhile, the Dow gained 0.05%, and the Nasdaq, a tech-heavy index, lost 0.69%.

Wall Street will be looking for positivity from DFS as it approaches its next earnings report date. The company is expected to report EPS of $0.46, down 80.17% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.63 billion, down 7.71% from the year-ago period.

DFS's full-year Zacks Consensus Estimates are calling for earnings of $1.91 per share and revenue of $10.88 billion. These results would represent year-over-year changes of -78.96% and -5.07%, respectively.

Investors should also note any recent changes to analyst estimates for DFS. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, 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. Over the past month, the Zacks Consensus EPS estimate has moved 3.54% lower. DFS is currently sporting a Zacks Rank of #5 (Strong Sell).

Looking at its valuation, DFS is holding a Forward P/E ratio of 29.99. For comparison, its industry has an average Forward P/E of 9.98, which means DFS is trading at a premium to the group.

We can also see that DFS currently has a PEG ratio of 5.89. 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 Financial - Consumer Loans industry currently had an average PEG ratio of 0.48 as of yesterday's close.

The Financial - Consumer Loans industry is part of the Finance sector. This group has a Zacks Industry Rank of 238, putting it in the bottom 7% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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