Investors Heavily Search Southern Company (The) (SO): Here is What You Need to Know

Southern Co. (SO) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.Shares of this power company have returned +2.6% over the past month versus the Zacks S&P 500 composite's +1.3% change. The Zacks Utility - Electric Power industry, to which Southern Co. belongs, has gained 1.2% over this period. Now the key question is: Where could the stock be headed in the near term?Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.Southern Co. is expected to post earnings of $1.50 per share for the current quarter, representing a year-over-year change of +4.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +9.3%.For the current fiscal year, the consensus earnings estimate of $4.28 points to a change of +5.7% from the prior year. Over the last 30 days, this estimate has remained unchanged.For the next fiscal year, the consensus earnings estimate of $4.59 indicates a change of +7.4% from what Southern Co. is expected to report a year ago. Over the past month, the estimate has remained unchanged.With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Southern Co..The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:12 Month EPSProjected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.For Southern Co., the consensus sales estimate for the current quarter of $7.57 billion indicates a year-over-year change of +4.1%. For the current and next fiscal years, $28.77 billion and $30.13 billion estimates indicate +7.7% and +4.7% changes, respectively.Last Reported Results and Surprise HistorySouthern Co. reported revenues of $6.97 billion in the last reported quarter, representing a year-over-year change of +7.9%. EPS of $0.91 for the same period compares with $1.09 a year ago.Compared to the Zacks Consensus Estimate of $6.56 billion, the reported revenues represent a surprise of +6.24%. The EPS surprise was +4.6%.Over the last four quarters, Southern Co. surpassed consensus EPS estimates three times. The company topped consensus revenue estimates each time over this period.ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.Southern Co. is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Southern Co.. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Southern Company (The) (SO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks