Crexendo (CXDO) Surges 7.2%: Is This an Indication of Further Gains?

Crexendo (CXDO) shares ended the last trading session 7.2% higher at $6.37. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 8% gain over the past four weeks.

CXDO’s rally is driven by optimism over the increased deployment of video collaboration and mobility solutions across the dynamic telecommunications industry. Its merger agreement with NetSapiens, a patented cloud-native communications platform for service providers, proved to be a driving factor.

Markedly, its latest partnership with Rev.io will enable Crexendo to capitalize on the sophisticated billing platform and avant-garde customer management system of the former for automating key billing processes. Also, robust demand for Unified Communications as a Service acts as a major tailwind. Backed by such focused endeavors, Crexendo is likely to continue witnessing an impressive growth trajectory in the coming quarters through strategic acquisitions and planned expenditures.

This company is expected to post quarterly earnings of $0.01 per share in its upcoming report, which represents a year-over-year change of -75%. Revenues are expected to be $5.56 million, up 37.3% 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 Crexendo, the consensus EPS estimate for the quarter has been revised 50% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on CXDO 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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