Entravision Communications (EVC) Moves 7.7% Higher: Will This Strength Last?

·2-min read

Entravision Communications (EVC) shares soared 7.7% in the last trading session to close at $5.16. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 25.7% gain over the past four weeks.

The upswing in share price came after Entravision announced that it has entered into a definitive agreement to acquire MediaDonuts, a leading digital marketing performance and branding company with operations across seven countries in the Asia-Pacific region.

Entravision’s acquisition of MediaDonuts is the next key step in the company’s plan to become a leading marketing technology service provider in the region. MediaDonuts will provide the company with an opportunity to explore an untapped consumer market, Southeast Asia that has nearly 700 million people, of which 400 million are digitally connected.

This Spanish-language media company is expected to post quarterly earnings of $0.08 per share in its upcoming report, which represents a year-over-year change of +166.7%. Revenues are expected to be $163.1 million, up 261.5% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Entravision Communications, 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 EVC 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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