ODP Corp. Laps the Stock Market: Here's Why

The most recent trading session ended with ODP Corp. ODP standing at $28.75, reflecting a +0.49% shift from the previouse trading day's closing. The stock outpaced the S&P 500's daily gain of 0.4%. Elsewhere, the Dow saw an upswing of 0.62%, while the tech-heavy Nasdaq appreciated by 0.6%.

Heading into today, shares of the office supply retailer had lost 3.86% over the past month, lagging the Retail-Wholesale sector's gain of 5.71% and the S&P 500's gain of 1.71% in that time.

Investors will be eagerly watching for the performance of ODP Corp. in its upcoming earnings disclosure. In that report, analysts expect ODP Corp. to post earnings of $1.49 per share. This would mark a year-over-year decline of 20.74%. Meanwhile, our latest consensus estimate is calling for revenue of $1.83 billion, down 9.13% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates project earnings of $4.29 per share and a revenue of $7.13 billion, demonstrating changes of -23.39% and -8.96%, respectively, from the preceding year.

Investors should also pay attention to any latest changes in analyst estimates for ODP Corp. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 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 last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Currently, ODP Corp. is carrying a Zacks Rank of #3 (Hold).

In terms of valuation, ODP Corp. is currently trading at a Forward P/E ratio of 6.68. This expresses a discount compared to the average Forward P/E of 14.34 of its industry.

Also, we should mention that ODP has a PEG ratio of 0.48. 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. By the end of yesterday's trading, the Retail - Miscellaneous industry had an average PEG ratio of 2.3.

The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 167, putting it in the bottom 34% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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