Adtran (ADTN) Soars 13.3%: Is Further Upside Left in the Stock?
Adtran (ADTN) shares soared 13.3% in the last trading session to close at $19.93. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 4.7% loss over the past four weeks.
ADTN’s rally is driven by the company’s solid first-quarter 2021 results, wherein both the bottom and the top lines beat the respective Zacks Consensus Estimate. It witnessed record product order bookings in the quarter. Notably, its quarterly total revenues grew to $127.5 million from $114.5 million in the prior-year quarter, reflecting the increased demand for ADTRAN’s network solutions. The company’s business continues to be driven by strong demand for its fiber access platforms, in-home service delivery platforms and software platforms with regional service providers across the United States and Europe.
Price and Consensus
This networking equipment maker is expected to post quarterly earnings of $0.14 per share in its upcoming report, which represents a year-over-year change of +250%. Revenues are expected to be $140.7 million, up 9.3% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Adtran, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on ADTN going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
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