have to go back to Oct 24 for the last quarterly report, but it was a good one. Net income surged from $21.8 million to $78.6 million. Revenue for the period was up 6% to $1.02 billion.

Earnings per share came in at $1.63, more than double the $0.70 that analysts polled by Zacks were expecting. That gives Unisys back to back surprises.

Estimates are Up

Full-year estimates for this year rose $1.05 on average to $2.36. Next year's Zacks Consensus Estimate is up 22 cents, to $3.25. Last year the company made $3.67. So this is an earnings contraction, but the upward momentum in those estimates could lead to solid gains.

Valuations

Shares of UIS are trading with very cheap valuations, which is not surprising since many will see the negative short-term growth rate and move on. But there is growth potential moving forward.

The stock is trading at just 6 times next year's estimates, which puts the PEG ratio at 0.9. The price to sales is just 0.2 times.

The Chart

UIS jumped on the earnings surprise but has been hit hard since. Right now it looks like shares are oversold, hence those valuations, and could be a good target for bottom fishing soon.

Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service

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