Is Sensient Technologies stock a buy or a sell amid its bullish run?
The shares of Sensient Technologies Corporation (NYS:SXT) are up 2% at $92.94 this afternoon, as the company gears up for its fiscal third-quarter earnings report, which is due out before the open on Friday, Oct. 15. Below, we will further explore the stock's technical performance on the charts, as well some of its previous post-earnings activity.
The security has had a mixed history of post-earnings reactions, finishing four of its past eight next-day sessions higher, while four were lower. However, the company did post an 8% pop in October 2020. This time, options traders are pricing in a 5.5% next-day swing for the equity, regardless of direction.
Sensient Technologies stock has been tearing up the charts recently, culminating in its Sept. 30, all-time high of $93.82. The 180-day moving average has been instrumental in the stock's climb, containing a pullback to the $78 level in July. Year-over-year, SXT is up 60%.
From a fundamental point of view, however, the security appears to be overvalued. Sensient Technology stock is currently trading at an inflated price-earnings ratio of 33.98, and has a very high forward price-earnings ratio of 24.27. In addition, the manufacturing company’s annual revenues and net income are down 2.4% and 26.5%, respectively, since 2018.
Furthermore, the company carries a relatively weak balance sheet with $21 million in cash, and $527 million in total debt. In simpler terms, the equity does not have much to offer fundamentally in the short-term or long-term, making now a great opportunity for investors to sell near peak.